The Economy of Classical Athens (Routledge Explorations in Economic History) [1 ed.] 9781032561547, 9781032561554, 9781003434146, 1032561548

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“In the past 50 years, intensive research by numerous devoted scholars has established that the economy in classical Athens functioned much like a money and credit-based market economy by drawing on the incentives of private property over the means of production in a framework of consistent and well-defined state institutions and regulations. If there are any doubts in the minds of those who side with the view that the ancient Athenian economy was ‘primitive’ and ‘backward,’ they are soundly dispelled by the powerful arguments submitted in this well-written book by Emmanouil M.L. Economou.” George C. Bitros, Emeritus Professor of Economics, Athens University of Economics and Business “Like Aristotle (άριστον τέλος), Dr Economou has a nomen that is also an omen. He is a leading expert on ancient Greek, and especially Classical Athenian economy in all its aspects and ramifications. In his thoroughly researched and powerfully argued Economics in Classical Athens: Organization, Institutions and Society he demonstrates that the Athenians in their democratic period of c. 500 to 320 BCE developed a high level of consent-building which played an essential role in founding their historical paradigm's great success. The Classical Athenian democracy was, indeed, in its economic aspect, a model of a social organism adaptive to change. All students of Athenian democracy, including comparative economic historians, will profit from a careful reading of this major new work.” Paul Cartledge, A.G. Leventis Professor of Greek Culture Emeritus, University of Cambridge, Faculty of Classics “In economics, it has become exceedingly clear that the most important factors for development are the institutions in a society, both the formal rules (laws, regulations, etc.), and the informal rules (such as social norms). Ancient Greece witnessed the introduction of many institutions that would prove to be conducive to market behavior (secure property rights, tradefriendly policies, etc.). And the ancient Athenian society of the Classical period is remarkable in many ways. Economou’s book is a very welcome addition to the literature on ancient Greece. Economou’s presentation of the Athenian institutional structure is comprehensive and meticulous. Some of the institutional features he describes are well-known in the social science literature, while others will be news to this audience and will provide very interesting reading. Economou deals a lot with both the Athenian welfare policies and public sector generally. Similarly, he devotes a substantial part of the book to the financial sector in Athens and to the role of money. Economou incorporates a substantial number of quotes from the literature in his writing, both from the ancient literature and from contemporary scholars. This is helpful, and it also makes for a more interesting reading experience. If you are interested in the mechanisms of institutional change, ancient Athens is a very useful place to begin your study, and if you are

interested in ancient Athens, this book by Emmanouil M.L. Economou is a very good place to start.” Carl Hampus Lyttkens, Professor Εmeritus of Economics, Department of Economics, Lund University, Author of Economic Analysis of Institutional Change in Ancient Greece, Routledge, 2013.

The Economy of Classical Athens

In parallel to the development of democracy, the Athenians of the Classical period established a series of sophisticated economic institutions for the time through which they developed a maritime and commercially oriented economy. This book provides a thorough analysis of this transformation and the functioning of the Athenian economy during the Classical period. Through the approach of New Institutional Economics (NIE), the book explores the establishment of key institutions including property rights protection, the legal protection of commercial contracts, prices determined by the forces of supply and demand, institutions against profiteering, banking services, the provision of loans through interest rates, consumer credit, insurance companies and a (primitive) version of joint-stock companies. Furthermore, the book focuses on the structure of the public sector, on how the state budget was determined and on how decisions on public revenues and expenditures were made. It also provides an integrated and detailed analysis of the social welfare policies that were implemented through the provision of a variety of public goods in Classical Athens. Moreover, it focuses on a series of socio-economic aspects such as the social status of women, slaves and foreigners and the viewpoints of prominent Athenian philosophers regarding economic organization. Finally, the book investigates whether an Athenian economic–political model of governance, based on a combination of advanced economic institutions (of free market type logic, even if in a primordial form) and direct democracy principles, can provide any lessons for modern societies. The book will be of great interest to readers of the economy, history and society of Ancient Greece as well as economic historians, ancient historians and policymakers more broadly. Emmanouil M.L. Economou is an Assistant Professor of History of Economic Institutions at the Department of Economics, University of Thessaly (Greece). He is a member of the Laboratory of Economic Policy and Strategic Planning (L.E.P.S.PLAN) in the same department. He is also a member of the Laboratory of Intelligence and Cyber-Security, Department of International and European Studies, University of Piraeus (Greece). His research focuses on Economic History, Institutional Economics, International Political Economy and Defense Economics. He is the author of nine books (five in English and four in Greek) with acclaimed publishing houses such as Routledge, Springer and Cambridge Scholars Publishing. He has contributed to the international academic bibliography with 38 papers in distinguished peer review journals, such as the Journal of Institutional Economics (3), Defence and Peace Economics (2), Sustainability, European Journal of Law and Economics, Peace Economics, Peace Science and Public Policy (2), Economics of Governance, Evolutionary and Institutional Economics Review, Homo Oeconomicus, and Journal of Risk and Financial Management (4). He is also a reviewer in the following highly distinguished journals: American Political Science Review, Journal of Institutional Economics, Cliometrica, Investigaciones de Historia Económica – Economic History Research (EHR) and Journal of Risk and Financial Management. He has further contributed to the international academic bibliography with 25 papers in English and Greek collective volumes. Furthermore, he has 79 publications of discussion papers (64 in English, in the IDEAS RePec – Munich International Library and 15 as “ΚΟΙΔΑ” discussion papers published by the L.E.P.S.PLAN Laboratory). He has participated in 43 international and Greek conferences.

Routledge Explorations in Economic History Edited by Lars Magnusson

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The Economy of Classical Athens Organization, Institutions and Society

Emmanouil M. L. Economou

First published 2024 by Routledge 4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 605 Third Avenue, New York, NY 10158 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2024 Emmanouil M. L. Economou The right of Emmanouil M. L. Economou to be identified as author of this work has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library ISBN: 9781032561547 (hbk) ISBN: 9781032561554 (pbk) ISBN: 9781003434146 (ebk) DOI: 10.4324/9781003434146 Typeset in Times New Roman by Deanta Global Publishing Services, Chennai, India

To my mother Agoritsa, to Andreas, to Vasiliki and Eudokia. To my brother Dimitris, to Christina and little Nicholas. For the full support they offered me during this arduous research odyssey. And to the memory of my father and Dimitri and Aristea Demopoulos. And to all the scholars around the world, who dedicated their lives to highlighting the great achievements of the ancient Greeks regarding their economy

Contents

List of Tables xiv List of Figures xvi List of Images xvii List of Abbreviations (ancient texts) xviii List of Abbreviations (modern terms) xix Foreword xx Acknowledgments xxv 1 Introduction Notes  6 Ancient Greek authors (Perseus Digital Library)  7 Modern Authors  7

1

2

9

The Ancient Economy: Some Further Introductory Issues 2.1 The Debate Regarding the “Backwardness” or “Modernity” of the Ancient Greek Economy  9 2.1.1 Implementing the New Institutional Economics Interpretative Tools and Concepts in the Case of Classical Athens  15 2.1.2 The Issues of Historical Anachronism and Economic Rationality in the Case of Classical Athens  19 2.2. The Relationship between Economics and Institutions: Path Dependence and Institutional Change  22 2.3. The Reforms of Cleisthenes and the Establishment of the Political Institutions of Athenian Democracy  28 2.4. Financing the Political Institutions of the Athenian Democracy  37 Notes  41 Ancient Greek authors (Perseus Digital Library)  43 Modern authors  43

x Contents 3

Adopting a “Turn to the Sea” Strategy and the Transformation of the Athenian Economy 54 3.1 The Gradual Creation of a Maritime Infrastructure during the Archaic Period and the Trireme Warship  54 3.2 Year 483/482 BCE: Themistocles’s Naval Decree: Exogenous Shock and Path Dependence and Change 58 3.2.1 Choosing between Two Paths: A Mathematical Formulation  62 3.2.2 Maritime Infrastructure and the Shipyards of Attica  63 3.2.3 The Athenian Fiscal Expansionary Policy for the Public Good of Defense  66 3.3 The Trierarchy 3P Institution and the Antidosis Procedure  67 3.4 The Athenian Thalassocracy during the Classical Period: A Defense Economics Perspective  73 Notes  80 Ancient Greek authors (Perseus Digital Library)  82 Modern authors  83

4

The Protection of Private Property and the Rule of Law 4.1 The Importance of Property Rights Protection for Achieving a Prosperous Economy  88 4.2 Property and Commercial Contracts Protection in the Athenian Daily Practice  90 4.3 Dikai Emporikai 93 Notes  95 Ancient Greek authors (Perseus Digital Library)  96 Modern authors  96

5

The Athenian Market 99 5.1 The Athenian Agora  99 5.2 Profit-making and the Forces of Supply and Demand  104 5.3 Consumer Protection and Measures against Profiteering  108 5.4 The “Secondary” Sector of the Economy and the Port of Piraeus  112 5.5. Neosoikoi, Philon’s Arsenal and the Athenian Long Walls  116 5.6 The Ancient Greek Philosophers on International Trade Theory  120 5.6.1 Transactional Cost Reductions and the Logic of Comparative Advantage  121 5.6.2 Market Specialization and the Issue of Technological Innovations 123 5.7 Trade and the Athenian Institutions behind International Commercial Treaties  130 5.8 The Athenian Philosophers’ Beliefs Regarding Entrepreneurship, Labor Productivity and Division of Labor  136 5.9 The Agricultural Sector and Husbandry  141 5.10 The Socio-economic Status of Women  143

88

Contents  xi 5.11 The Socio-economic Status of Slaves  148 Notes  152 Ancient Greek authors (Perseus Digital Library)  154 Modern authors  155 6

The Financial Institutions of the Athenian Economy 162 6.1 Banking Services and Maritime Loans  162 6.2 The Athenian Bankers  166 6.2.1 The Argyramoiboi (Money Changers)  168 6.2.2 The Development of Insurance, Securities and Mortgages  168 6.3 The Establishment of Primitive Joint-stock Companies  170 6.3.1 Joint-stock Companies in the Banking Sector  170 6.3.2 Joint-stock Companies in Other Relative Areas  175 6.4 The Institutional Mechanisms for Financing State Needs  177 6.4.1. The Demosion Fund (Demosion) 177 6.4.2 The Treasury of Delos or Allied Fund (AF)  180 6.4.3 The Treasuries – Temples of Athena (TTA) and the Other Gods (TTGs)  182 6.4.4 The Opisthodomos of the Parthenon  184 6.4.5. Public Borrowing from International Banks and from Individual Private Investors  188 Notes  189 Ancient Greek authors (Perseus Digital Library)  190 Modern authors  191

7

The Role of Money in the Economy 195 7.1 The Adoption of Currency in the Greek World as a Means of Conducting the Exchange of Goods and Services  195 7.2 The Mining Procedures in Classical Athens and the Athenian Mint  203 7.3 Money Decentralization under Direct Democracy Procedures in Decision-making  210 7.4 Nicophon’s Law  213 7.5. Coin-testing Techniques 219 7.6 The Coinage Decree and the Athenian Attempts to Create an Ad Hoc Monetary Union in the Eastern Mediterranean  222 7.7. The Issue of Inflation  228 Notes  229 Ancient Greek authors (Perseus Digital Library)  230 Modern authors  231

8

The Athenian Public Sector and State Budget 8.1 The Athenian Public Administration and Its Magistrates  236 8.2. Public Magistrates Collecting Funds as Public Revenues and the Board of Poletai  239

236

xii Contents 8.3. The Theorikon and the Stratiotikon Funds  242 8.4. Public Magistrates with Judicial and Secretarial Duties  244 8.5. Providing Various Types of Public Services: Water Management, Defense and Religious Festivals  245 8.6. The Supervisory Boards of Public Administration  247 8.7. State Auditing Institutions to Ensure Good Governance in the Public Sector  248 8.7.1. The Euthyna Procedure  249 8.7.2. Auditing Institutions to Ensure Good Governance in the Public Sector through Private Initiative  252 8.8 How the Athenian State Budget Was Determined  253 8.8.1 Managing the State Budget: The Merismos and the Tamias Tes Koines Prosodou  260 8.9 The Athenian Taxation System  263 8.9.1 The Eisphora Tax  263 8.9.2 The Liturgies  264 8.9.3 A Comment on the Fairness of the Athenian System of Taxation  266 Notes  268 Ancient Greek authors (Perseus Digital Library)  268 Modern authors  269 9

Economic Growth Policies in Classical Athens 273 9.1 Estimating the Athenian GDP and GDP Growth  273 9.2 Six Important Elements for Economic Growth in Classical Athens  275 9.2.1 Large-scale Public works: The Fiscal Expansionary Programs of Pericles, Eubulus and Lycurgus  275 9.2.2 Population Growth 281 9.2.3 Life Expectancy 282 9.2.4 Better Housing Conditions  283 9.2.5 Urbanization 285 9.2.6 Technological Innovations  285 Notes  286 Ancient Greek authors (Perseus Digital Library)  286 Modern authors  287

10 Social Welfare Policies through the Provision of Public Goods 290 10.1 The Provision of Public Goods by the Athenian State  290 10.1.1 The Offices Regarding Public Administration  291 10.1.2 Police Services 291 10.1.3 Ensuring an Effective Water Supply System  291 10.1.4 The Existence of a Functional Street and Road Network  292 10.1.5 Urban Spaces, Recreation and Beautification of the Athenian Polis  293 10.1.6 Measurement of Time as a Public Good  294

Contents  xiii 10.2 Public–Private Partnerships for the Provision of Public Goods  294 10.2.1 Defense 294 10.2.2 Diplomatic Missions 297 10.2.3 Hygiene Services 297 10.2.4 Health Care 298 10.2.5 Education 299 10.2.6 Athletic Infrastructure  301 10.2.7 Entertainment and Education on Moral Values  302 10.2.8 Religious Festivals 302 10.3 The Provision of Publicly Provided Private Goods: Social Security for Disabled Persons  303 Notes  305 Ancient Greek authors (Perseus Digital Library)  305 Modern authors  306 11 Epilogue: The Athenian City-state Culture: Economy, Freedom, Democracy and the Rule of Law Notes  319 Ancient Greek authors (Perseus Digital Library)  319 Modern authors  320 Glossary of Greek terms Index

309

323 332

Tables

2.1 Economic/fiscal institutions in Classical Athens 2.2 Financial/monetary institutions in Classical Athens 2.3 Main socio-political developments of the period 508–322 BCE in Athens 2.4 Key institutional changes taking place in Athens between 594 to 322 BCE 2.5 The nexus between the main Athenian state institutions 3.1 The annual cost of a running a trireme 3.2 Comparison of Athenian and Peloponnesian naval forces 5.1 Public buildings in the Athenian agora (fifth century) 5.2 Modern international trade principles that can be found in the Athenian economy 5.3 Recorded inscriptions of symbola 5.4 The politico-economic institutions of Athens as the leader of the Athenian Alliance 5.5 Distribution of land ownership in Attica 6.1 The two-step process toward the creation of the Athenian jointstock companies in banking 6.2 The institutions of collecting and distributing the Athenian state revenues 6.3 The role of the Athenian “mega-treasuries” 6.4 Evolution and changes of mega-funds during the Classical period 7.1 Athenian drachma and obol denominations 7.2 The function of money in the Athenian economy 8.1 The Athenian public administration through its magistrates 8.2 State revenues collected through the poletai and the Demosion 8.3 Total number of employees in the public sector in 431 BCE 8.4 The formulation of the Athenian budget in 431 BCE (in talents) 8.5 Athenian budget c. 435–330s (in talents) 8.6 Means of collection and increase of public revenues 8.7 Sources of public revenues of the Athenian city-state

14 18 26 27 40 70 77 101 123 134 135 143 174 178 187 188 203 213 238 241 254 254 255 257 258

Tables  xv 8.8 Fines imposed to protect the public interest and to solve disputes between parties 8.9 Managing the budget of the Athenian mega-funds 8.10 The sophisticated system of the Athenian financial administration in the fourth century BCE 8.11 The categories of liturgies 10.1 The provision of various versions of public goods by the Athenian state

259 260 262 266 304

Figures

2.1 External shock and an institutional change of a regime 27 2.2 The institutions of cooperation and interaction of the Athenian city-state 37 3.1 The “butter versus guns” dilemma of the Athenians under Themistocles’s proposal. 59 3.2 Choosing between two different strategies of economic policy. 62 3.3 Fiscal expansionary policy and short-term growth. 67 3.4 Athenian naval supremacy on a statistical scale. 79 5.1 The business cycle theoretical concept. 106 5.2 A shift of the demand curve in Pistias’s factory. 126 5.3 Technological innovations and economic espionage in the agora of Athens. 129 6.1 “Turn to the sea,” banks, savings, investments and economic growth. 167 9.1 Long average cost reduction through a massive production strategy. 279

Images

3.1 3.2 3.3 5.1

The Olympias, a replica of an ancient trireme (from the bow side) 56 Greek phalanxes in collision. A part of the famous Chigi vase depiction 61 Τhe Tomb of the Salaminian Fighters, Kynosoura, Salamis 64 The location of the agora of Athens (the Acropolis is in the background on the right) 100 5.2 Spatial illustration of the ancient agora (fifth century) and the mint (building No. 2) 101 5.3 Neosoikos (a trireme’s hangar) 117 5.4 Artistic impression of a merchant ship of the Classical period 119 5.5 Philon’s arsenal (artistic impression) 120 6.1 The backside of the Temple of Athena at the Parthenon in Acropolis with the Opisthodomos 184 6.2 The Opisthodomos at the Temple of Athena on the Acropolis. Opisthodomos (O), Temple of Athena Parthenos (TAP), Pronaos (P) 185 7.1 An Athenian tetradrachm 198 7.2 An Athenian decadrachm 198 7.3 An Athenian drachma 199 7.4 An Athenian hemidrachm (three obols) 200 7.5 An Athenian diobol 200 7.6 An Athenian obol 201 7.7 An Athenian tritartemorion. https://www​.wildwinds​.com​/coins​ /greece​/attica​/athens​/SNGCop​_057​.jpg With the permission of Wildwinds​.co​m 201 7.8 An Athenian hemiobol 202 7.9 An Athenian tetartemorion 202 7.10 Part of the Athenian silver mint installations 204 7.11 A part of an ore-washing unit in Thorikos at Laurion 207 7.12 A part of the interior of a mine in Thorikos at Laurion 208 7.13 Athenian tetradrachm with multiple test cuts 220 7.14 An Aeginetan stater 226 7.15 A Corinthian stater 226 10.1 The author in front of a part of the Aigosthena fortress 296

Abbreviations (ancient texts)

Ancient Authors’ Works Aeschines, Andocides, Aristophanes, Aristotle, Aristotle, Aristotle, Aristotle, Aristotle, Demosthenes Demosthenes, Demosthenes, Demosthenes, Herodotus, Homer, Lysias, Lysias, Lysias, Plato, Plutarch, Plutarch, Polybius, Pseudo-Xenophon, Thucydides, Xenophon, Xenophon, Xenophon, Xenophon Memorabilia,

Against Ctesiphon (Aesch., Ag. Ct.) On the Mysteries (Andoc., M.) Frogs, (Aristoph., Fr.) Constitution of the Athenians, (Arist., Ath. Const.) Eudemian Ethics, (Arist., Eud. Eth.) Nicomachean Ethics, (Arist., Nic. Eth.) Oeconomica, (Arist., Oec.) Politics, (Arist., Pol.) Against Lacritus, (Dem., Ag. Lac.) Against Timocrates, (Dem., Ag. Tim.) Against Zenothemes, (Dem., Ag. Zen.) For Phormio, (Dem., F. Ph.) Histories, (Herod., Hist.) Iliad, (Hom. Il.) Against the Corn Dealers, (Lys., Dls.) Against Eratosthenes, (Lys., Ag. Er.) Against Nicomachus, (Lys., Ag. Nic.) Republic, (Pl., Rep.) Pericles, (Plut., Per.) Solon, (Plut., Sol.) Histories, (Pol., Hist.) Constitution of the Athenians, (Ps.-Xen. Con.) History of the Pelop. War, (Thuc., Hist.) Ways and Means, (Xen., W.M.) Oeconomicus, (Xen., Oec.) Cyropaedia, (Xen., Cyr.) (Xen., Mem.)

Abbreviations (modern terms)

3Ps: 3PPub.Gs: AF: Demosion: JSCs: Pub.PriGs: QSIs: Talents: TTA: TTAGs: TTGs:

Public–private partnerships Public–private partnerships for the provision of public goods Allied Fund Demosion Fund joint-stock companies Publicly provided private goods quasi-state institutions T Treasuries – temples of Athena Treasuries – temples of Athena and the other gods Treasuries – temples of the other gods

Foreword

The longstanding debate among students of ancient societies and, in particular, of their economies has pitted so-called primitivists against modernizers (or more neutrally put, but no less misconceived, between substantivists and formalists). The focus has retarded collaboration between ancient historians and social scientists generally and especially with economists. In the period after the Second World War and amid the Cold War, these controversies assumed an ideological tone, and they tended to render classical history insular within the framework of global social history. If modern scholarship in economics could not help to analyze the material aspects of classical society, then any such dialogue between ancient history and economics could only be an exercise in juxtaposition, never achieving true disciplinary cross-fertilization. Given the strongly leftward tilt of the professoriate – notably in America, where those with other political shadings have been virtually excluded from university careers in the humanities and soft social sciences – it was not only quite out of fashion but even professionally risky to insist that work by twentieth-century economists was integrally relevant to investigations in ancient Greek history. At the same time, quantification in the study of classical socio-economic conditions was stymied, in which even figures on the ideological left, such as my teacher and friend Keith Hopkins, were more admired for the originality of their insights than copied for their methodology. Nonetheless, starting in the 1980s, historians of Classical Greece did persevere to analyze the ancient evidence with closer textual attention and necessarily without ideological blinders, and began both to utilize data that was quantifiable and to exploit comparative quantification. For my part, buoyed by early exposure to Austrian School and Chicago School economists, I investigated the early history of Aegina, a polis whose atypicality established a wider range for Greek social structures. I also started to revisit the passages from ancient authors in M.M. Austin and P. Vidal-Naquet, Economic and Social History of Ancient Greece (1977), in which I discovered rich sources for non-ideological, textually dense and socioeconomically aware investigations, some of which have evolved into lifelong preoccupations. Nor has my experience been unique; other social historians of Greek antiquity have traveled parallel intellectual odysseys. One of the strongpoints of this work is that Economou has read deeply in this scholarship. He discusses much of our collective research, to such an extent that those previously unexposed to this scholarship will find an excellent point of entry

Foreword  xxi to nearly all areas of significance regarding Athenian economic conditions. It is the author’s hope that this work will draw in economists, historians, political scientists and researchers in the behavioral sciences as well as sociologists, policymakers and company managers. And I predict that this book will be a vital primer for many non-specialists. Yet it may well also be a work to which incoming graduate students in ancient history, archaeology and cultural classicism ought and will be directed to turn for bibliographical assistance (e.g., note Tables 2.1 and 2.2). I would be remiss if I did not mention the schools of economic analysis that are featured herein: Economic History, Institutional Economics, Historical Political Economy and Behavioral Economics as well as other supportive disciplines such as Defense Economics, History of Economic Thought, etc. In the past decade especially, an entirely new realm of cooperation has been created by Greek economists. They have begun to build important bridges between their professional colleagues in their own discipline and the community of ancient historians. This is because they have been able to bring their traditions of cultural literacy into our dialogues. Their Hellenicity has rendered them familiar with texts in ancient Greek, and they are steeped in Greek history as their socio-cultural heritage. This intellectual proximity has brought Hellenes and Philhellenes together in new spaces for the exchange of ideas. Please indulge me if I do not provide an exhaustive enumeration but, rather, limit myself to a few names with whom, like our author (Emmanouil M.L. Economou), I have been exchanging ideas: G.C. Bitros, N.C. Kyriazis and, before his sad early death, A. Karayiannis. These economists and their collaborators have been actively soliciting scholarship and advice, sharing work in progress and bringing together colleagues and ancient historians enjoying common interests. I am then offering a foreword for a work that will become an important addition to the dossier of research empowered by this promising new regime of intellectual discourse. Before entering upon a general precis of the work at hand, I should like to highlight three aspects (out of many) of the research below which resonated strongly with me; they will truly have me reengaging and rethinking their subjects. The first concerns Athenian sea-power (in Chapter 3), in which we find a Public Choice analysis which explores how public and private goods might be symbolically and mathematically represented. This opens out into analyses both of the Athenian “turn to the sea” and of the discrepant interests of Peloponnesian commanders at Salamis as opposed to Themistocles. Here Economou’s symbolic presentation dramatically reveals to economists some of the longstanding reoccupations of classical historians. In Chapter 5, the outward-facing treatment of the commercial sector is laudable, as the author has directed a carefully wrought discourse toward his fellow economists with aspects that not only convey the author’s view on rather controversial issues but also offer a template for ancient historians who would like to contribute to this debate. This type of paradigmatic investigation is also prominent in Chapter 7’s discussion of Nicophon’s law of 375/374, which provided for the emplacement of public slaves to carry out evaluation and approval of silver coinage for use in the market. Interpretation among specialists here has long been beset with many controversies. Economou has here introduced a game-theoretical

xxii Foreword approach to his analysis which has provided a means to open these debates to economists and for us to listen for reactions. Let me now turn to an outline of this book’s contents: The introductory chapter explains its main scope. Chapter 2 deals with some further preliminary issues such as the topic of the debate regarding the “backwardness” or “modernity” of the ancient Greek economy, followed up by two sections which focus on the relationship between economics and institutions and the issues of path dependence and institutional change. We further proceed to a brief analysis regarding the crucial socio-economic reforms introduced by the lawgiver Kleisthenes that led to the emergence of Athenian democracy. Chapter 3 describes how Athens successfully responded to Xerxes’s invasion (480/479 BCE) by transforming its economic and institutional structure from agrarian toward one of a maritime and commercial orientation. Here a perceptive leader and general Themistocles convinced his compatriots to prioritize state defense by building 200 trireme warships. This transformation was accompanied by rapid development of the “secondary” and the “tertiary” (services) sectors, significantly altering the character of the economy and transforming subsequent strategic objectives of Attic policymakers. Chapter 4 explores how these economic institutions were developed, applied and functioned in practice. Special treatment is given to property rights protection and the legal protection of commercial contracts. This included the so-called dikai emporikai (trials for commercial litigation). Economou argues that the institutional development of the judicial system was a necessary precondition for the viability of rapidly expanding commercially oriented financial institutions. Chapter 5 focuses on the Athenian market, where transformation of the economy from an agrarian predominance into a maritime and commercially oriented one led to an evolution of a comparatively advanced free market institutionality (even with continuing primitive aspects), such as measures against profiteering, ensuring market prices determined by the laws of supply and demand and promoting harmony while performing local and international transactions. This chapter further explains how these institutions were interconnected and why these institutions were responsible for the rise of classical Athens as a leading economic and geopolitical power in the eastern Mediterranean. The port of Piraeus as essential for this impressive development is appraised here. This chapter also deals with contemporary intellectual views (from Thucydides, Xenophon, Plato, and Aristotle) on the economy and international trade. Moreover, there is discussion of the Attic agrarian economy and the socio-economic position of women and slaves in society. Chapter 6 goes on to describe a series of key Athenian financial institutions. Banking services played a key role in the commercial orientation of the Attic economy, including its outward facing activities. The status of bank lending policies, which were strongly related to maritime loans is examined. We learn that interest rates regarding banking loans were set according to the types and levels of risk that Athenian and foreign merchants were willing to undertake. It is argued that the Attic economy was probably the first (or one of the first) in which insurance and joint-stock companies regarding commercial action operated. This chapter also demonstrates the importance of three institutions: the Demosion (public treasury),

Foreword  xxiii the fund (with reserves) of the Athenian Alliance, and the sacred treasuries (those of Athena and of the other gods) as key institutional mechanisms for financing state needs. Chapter 7 deals with a key intertemporal issue: the role of money (in the form of currency) in the economy. More specifically, it analyzes the process of mining and producing silver currency from the Laurion mines, the kind of currency issued and circulated within the economy, and the creation and the establishment of monetary networks in the Mediterranean that led to the so-called Coinage Decree and the Law of Nicophon which made the Athenian drachma the leading currency in the eastern Mediterranean. This chapter further describes how decisions regarding the determination of money supply were taken. It stresses that such decisions were taken under direct democracy procedures in a system without a central bank and argues that this system proved feasible and functional. It further presents the coin-testing techniques that were practiced in order to secure the purity of Athenian drachmae against forgery. This was a very important institutional prerequisite and proved to have been one of the main reasons for the general acceptance of Athenian coins as the “dollar of the Classical times.” Furthermore, this chapter, among others, describes how Athens managed to handle public deficits during extraordinary times, along with the related issue of inflation in the economy. Chapter 8 analyzes in detail the variety of public offices and supervisory boards and explores the practices of auditing to ensure a proper functioning of instruments of Athenian public administration. Furthermore, it deals with the means for determining the state budget and the allocation of revenues to the various state authorities. Next it covers another crucial issue, Athenian taxation practices, to which is attached a concluding discussion on the degree of efficiency and fairness of the taxation system. Chapter 9 examines the issue of economic growth by connecting it with qualitative elements such as population growth, life expectancy, better housing conditions and the fiscal expansionary programs through public works, undertaken by Pericles, Euboulos, and Lycurgus, which proved highly beneficial in achieving long-term economic growth. Chapter 10 provides a coherent analysis regarding the provision of public goods such as defense and police services, diplomatic missions, health care and hygiene, an effective water supply system, and a functional road network, urban spaces and recreation and beautification of the city of Athens. Moreover, it argues that the Athenian state also intervened in some part in the provision of some further public goods such as athletic infrastructures, social security, entertainment, education and religious festivals. It also argues that social welfare policies were also introduced by the Athenians. Finally, Chapter 11 offers a synopsis of the findings of this work, focusing on what can be learned from the Athenian paradigm regarding economic policy decisions. It highlights the emergence of an Athenian polis based on the following principles: economic development, freedom, democracy and the rule of law. It also provides policy proposals for today's democratic societies, inspired by the working of the institutions of the Athenian democracy, focusing on what we can learn from

xxiv Foreword the Athenian paradigm regarding the nature of democratic governance and implementing efficient economic policy decisions by governments. I welcome this work particularly – and believe that many social historians of Greek antiquity will join me – because it shares a belief in the significance of the research to which we have committed ourselves. Economou has labored strenuously both to link Athenian economic practices to our contemporary global context and to provide proposals, inspired by classical experience, for improving the quality of governance going forward. He reminds us that modern societies and democratic regimes still face intertemporal problems such as the rise of public debt on the international level, equal (or unequal) wealth distribution, and the achievement of democratic legitimacy in decision-making by modern political parties and elites. These problems offer congruencies to those challenges which Athens also faced during the classical period and, as our author argues, Athenian democrats implemented an amazing package of sophisticated (for their context) solutions. The ultimate goal of these policymakers was to increase the overall welfare of their society by improving the quality of governance through the implementation of direct democracy procedures in decision-making regarding economic matters. Thomas J. Figueira Distinguished Professor of Classics and of Ancient History Department of Classics Rutgers, The State University of New Jersey – New Brunswick (USA)

Acknowledgments

I would like to express my deepest gratitude to Thomas Figueira (Rutgers University) for his kindness in preparing the Foreword of this book, as well as his overall advice. I also owe special thanks to Paul Cartledge (Cambridge University), Carl Hampus Lyttkens (Lund University), George C. Bitros (Athens University of Economics and Business), Alain Bresson (University of Chicago), Manfred J. Holler (Hamburg University), Nicholas C. Kyriazis (University of Thessaly), Nikolaos A. Kyriazis (University of Thessaly), and Dr. Sarah George Figueira (retired editor and production manager in Hesperia Journal and other ASCSA publications) for their careful reading of the book and for providing their very fruitful comments and suggestions that led to the improvement of this work. A special thanks is reserved for Nicholas C. Kyriazis with whom I have worked on the preparation of a number of published books as well as a long series of papers in acclaimed academic journals and collective volumes, in both English and Greek, related to the economic history, historical political economy and institutional economics of Classical Athens (508–323 BCE). I also offer my thanks to George Tridimas (Ulster University), Geoffrey M. Hodgson (Loughborough University), Jürgen G. Backhaus (Erfurt University), Dimitris Kyrtatas (University of Thessaly), Claude Diebolt (University of Strasbourg), Michael Haupert (University of Wisconsin), Michail Pikramenos (Vice President at the Greek Council of State & Aristotle University of Thessaloniki), Spyridon Vlachopoulos (National and Kapodistrian University of Athens), Athanasios Platias, Ioannis Konstantopoulos and Andreas Liaropoulos (University of Piraeus), Xenophon Paparrigopoulos (University of Peloponnesus), Bas van Bavel (Utrech University), Gunnar Heinsohn (University of Bremen), Bertram Schefold (Goethe University in Frankfurt), Novo Plakalovic (University of East Sarajevo), Spyridon Vliamos (Mediterranean College), and the late Gerrit Meijer (University of Maastricht), for a number of older comments and suggestions to me on various aspects of the economic and sociopolitical institutions of Ancient Greece in general. For the same reasons, I should also thank my colleagues at the Department of Economics at the University of Thessaly, Prof’s. Michel S. Zouboulakis, Christos Kollias, Theodore Metaxas, Paschalis Arvanitidis, Loukas Zachilas, and George Halkos.

xxvi Acknowledgments I am also grateful to Andreas Gkouvas for his tireless support on various research issues that I have undertaken all these years, as well as, to the artist Vasiliki Demopoulou for her advice in the preparation of the Figures 5.3–5.5 and 6.2 intended for this particular book. I am also grateful to Dane Kurth – Rowe for her kindness to grant me permission rights to use the wonderful coin images 7.1–7.9 and 7.13–7.15 in Chapter 7. My last thanks go to my Routledge editor, Andy Humphries, and his colleagues Holly Martin and Rupert Spurrier, and the project manager, Pradiksha Dharsini, for the wonderful collaboration we had during the publication process of this book.

1

Introduction

The principal aim of this book is to provide a synthetic analysis that focuses on the economic organization and the institutions through which economic policy was implemented in practice in the Athenian city-state during the Classical period (508–323 BCE) by connecting this evidence with crucial socio-political aspects that characterized the Athenian society. This book argues that parallel to the development of democracy, the Athenian city-state established a series of sophisticated economic institutions that transformed the Athenian economy from its agrarian roots into a maritime and commercially oriented one. These institutions included, among others, property rights protection, the legal protection of commercial contracts, price determination by the forces of demand and supply, policies against profiteering, banking and insurance services, a primitive version of joint-stock companies; measures to protect its currency’s trustworthiness from fraud and forgery and a well-developed public sector. In particular, the book further focuses on the structure of the public sector, on how decisions about public expenditures were made and on the so-called treasuries – temples, which can be seen as quasi-state institutions which functioned as banks that lent money (mainly) to the Athenian state to cover its fiscal needs. The book also sheds light on the Athenian welfare state policy through mechanisms such as the provision of public goods, the creation of public–private partnerships for the provision of public goods and the provision of publicly provided private goods. At appropriate points throughout the text, comments on the views of prominent Athenian philosophers regarding economic organization and economic policy are also provided as supportive material. The book further focuses on a series of socioeconomic, political and conceptual aspects of Athenian society, such as the position of women, slaves and foreigners. It provides a synthesis between historical evidence, institutional theory and economic analysis and, among others, explains why the Athenian economic–political model, which was based on the nexus between advanced economic institutions for the times and direct democracy principles, proved a very successful historical paradigm. The book further guides the interested reader to a series of conclusions that could inspire modern policymakers to introduce mechanisms to remedy various structural economic policy problems that modern societies face today on a global level. It is true that a large part of the published contributions in the academic bibliography regarding the economy in Classical Athens and in Ancient Greece in DOI:  10.4324/9781003434146-1

2 Introduction general, is based on historiographical analyses. A statistical record of the international academic literature on the study of Ancient Greece, in general, reveals that the majority of such research (books, monographs, papers in journals and articles in collective volumes, etc.) mostly concerns the study of political history and, to a lesser extent, other aspects of social life such as, for example, people’s daily habits, how agricultural production was organized or how market transactions were conducted. The main reason for this is that much of the material in the surviving ancient sources is mainly related to issues of political history. This is justified by the reasoning that politics were considered (as they are today) of primary importance to the whole of society. A main qualitative feature and advantage of this book, when compared to previous studies, is that it analyzes and interprets a plethora of historical facts of economic significance through the lenses of an economic historian who uses economic analysis concepts by focusing mainly on institutional theory. A large part of earlier studies’ assumptions regarding Ancient Greece is mainly based on historical and archaeological findings. This book, while fully respecting ancient sources, archaeological findings and modern historical literature, attempts to link these sources of evidence with economic analysis by using modern methodological tools and theoretical concepts. This is done carefully and in a way to ensure that the analysis does not degenerate into what is known as historical anachronism.1 Throughout the book, a very large number of citations are provided, accompanied by a quite extensive bibliography that follows at the end of the book as well as a glossary and an index that function as supportive evidence regarding the overall argumentation. In Chapter 2, I provide an explanation and a literature review regarding the debate on the issue of the “primitiveness,” “backwardness” or “embeddedness” of the ancient Greek economy versus “formalism” or “modernity,” still an open issue today, something which is quite logical as, in many cases, the surviving ancient sources and archaeological research expose deficiencies, and there are no available cliometrics to allow us to be driven to definitive conclusions. In the course of the analysis, it will be proven that the New Institutional Economics (NIE) perspective interprets the economic organization and policy in Classical Athens with superior explanatory power and in a more appropriate way than other methodological approaches. Views still differ on the economic achievements of the ancient Greek world. But this is not something new in economics and social sciences in general. It is true that an economic event, such as the global financial crisis of 2007–2008 originating in the United States, the negative economic consequences of the COVID19 pandemic coming out of China or the negative macroeconomic consequences at the global level due to the Russo-Ukrainian War occurring at the time of writing, can be seen very differently if one chooses to interpret the events through the lens of different schools of economic thought, e.g., Neoclassical, Austrian, Monetarist, New Keynesian, New Institutional, Neo-Ricardian, Socialist, NeoMarxist, etc.

Introduction  3 Therefore, if there is no consensus among researchers from various disciplines regarding the economic implications of modern issues, such as the Greek debt crisis of 2010–2017, the European debt crisis from 2009 until the mid to late 2010s, Brexit, the negative economic consequences regarding the current COVID-19 global pandemic, climate change and the Russo-Ukrainian War, one can understand how much more difficult it is for modern researchers to come up with a coherent interpretation regarding the organization and performance of the ancient Greek economy, especially when cliometrics are missing. However, as will be explained in Chapter 2, over the past 30 years, the general argument in the international bibliography supports the modern characteristics of the ancient Greek economy, and the evidence is overwhelmingly superior to (mostly) older views on its primitiveness. Among others, O’Halloran (2018, 15) characterizes the “Finleyan orthodoxy” of a primitive Athenian economy as obsolete and adds (ibid., pp. 48–49) that primitivism’s belief that the Classical world was an economically stagnant agrarian society in which predatory aristocratic elites squandered all economic surplus, forestalling capital accumulation, investment and growth, is simply wrong, at least as regards Classical Athens. Thus, as will later be explained in detail, the fact that Classical Athens was a “pre-modern economy” does not necessarily imply that this kind of an economy was not accompanied by organized markets and economic institutions with advanced characteristics. The primary aim of this book is to provide an effective synthesis of a large part of the literature and, in combination with the ancient sources, the archaeological evidence and various interpretative tools from economic analysis, to provide a coherent holistic analysis regarding how the Athenian economic institutions functioned and how economic policy was implemented in practice in the daily life of the Athenian citizens. In the course of this book, these sources are placed appropriately in the text. The approach of analyzing the evidence is based on the explanatory logic of an economist’s point of view that follows an interdisciplinary composition of the available evidence. Thus, the approach of the book benefits from a variety of methodological concepts of economic analysis, focusing mainly on Economic History, New Institutional Economics and Historical Political Economy. It further reinforces its argumentation through the use of concepts related to the following economic fields of research: Defense Economics, Economic/Fiscal Sociology, Behavioral Economics, Public Economics, History of Economic Thought, Monetary Theory and International Trade Theory. To strengthen my arguments, I have placed, at appropriate points throughout the book, specific passages from ancient sources translated into English. I have extracted these passages from the Perseus Digital Library (Department of Classical Studies, Tufts University), as they are offered freely without restrictions. To enrich, describe and more efficiently explain my argumentation, I follow an interdisciplinary approach by making use of further theoretical concepts from additional scientific fields, when required, such as political science, political sociology, strategy and international relations theory. Interdisciplinary approaches gain more ground nowadays than in the past because, through such a methodology,

4 Introduction the interpretation of the phenomena that one deals with becomes more complete. Regarding this, in an obituary essay on his teacher Alfred Marshall, J.M. Keynes wrote: The master-economist must possess a rare combination of gifts…He must be mathematician, historian, statesman, philosopher – in some degree. He must understand symbols and speak in words. He must contemplate the particular, in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future (emphasis added by the author). Keynes (1924, 322) At this point, it should also be clarified that, as Amemiya (2007, 14) observes, no claim is being made that economics as a science was created in Ancient Greece, only that in many economic matters, the ancient Greeks were at the forefront in theory and practice. And although the risk of misinterpretation of the economic phenomena of Greek and Roman antiquity is real, nevertheless, the examination of ancient texts with modern methods of analysis, such as New Institutional Economics and rational-actor models of interpretation, have been gaining ground over the past three decades among eminent economic historians and classicists, as will be further explained in Chapter 2. Another question regarding this book is why the analysis of the ancient Greek economy focuses on the case of Athens in Classical times. A very satisfactory answer is given by Lyttkens (2013, 3), who argues that the institutional evolution of Classical Athens is by far the most well-known, and Athens was probably the first Greek city-state to introduce such a far-reaching and stable citizen’s democracy. Indeed, Athens was probably the first city-state of antiquity to implement democracy,2 and as is well-known, this was a milestone in the evolution of ancient Greek history. The military, economic and cultural power of democratic Athens made it a major factor in shaping the developments of the Greek world during the Classical period (Ober 2008; Bitros et al. 2020). As in later historical cases, such as England, which evolved into the British Empire, and eventually, the United States, Athens’s historical footprint was a very important one regarding the developments of the Classical period, as will be further explained in this book. With the establishment of the First Athenian Alliance (known also as the Delian League) between 478–404 BCE and the Second Athenian Alliance between 377– 355, the member states of the Alliance were influenced in various ways (economic, geopolitical, cultural, etc.) by the city-state of Athens, following the trends that the latter was promoting. For example, this parallels what happened during the Cold War in the case of the United States, which was considered to be the stronghold and the leader of the so-called “free world,” against the so-called “Iron Curtain” – the Soviet Union and the states that followed the socialist standards of economic organization. Figueira (1998, 52) mentions that, progressively, 316 city-states throughout the Hellenic world became members of the Athenian Alliance, while other authors

Introduction  5 argue that, at its apex, the alliance consisted of even more members. Therefore, the case of Athens looks like the role of the United States and its smaller Western allies and members of NATO during the Cold War and later on. Athens, along with Sparta, Syracuse (Sicily) and Miletus (Western Asia), was one of the most populous and powerful Greek city-states, far exceeding the population average (Ober 2008, 2011, 2015). Athens in the fourth century BCE numbered about 250,000– 300,000 souls in total, including free citizens, metics (alien residents), slaves and their families.3 But most importantly, Athens grew to become a school and a pioneer of developments throughout Greece. As was the case of the United States from the end of World War II (WWII) to today, the tendencies that prevailed in Athens significantly influenced the corresponding tendencies throughout the rest of the Greek world during the Classical period and, to a lesser extent, beyond. The Athenian state’s choices showed the “trend” that the rest of the allied city-states had to follow. This indisputable fact has been observed by Thucydides (Hist., 2.41.1–4) who, in his Funeral Oration, states that: In short, I say that as a city we are the school of Hellas; while I doubt if the world can produce a man, who where he has only himself to depend upon, is equal to so many emergencies, and graced by so happy a versatility as the Athenian…For Athens alone of her contemporaries is found when tested to be greater than her reputation, and alone gives no occasion to her assailants to blush at the antagonist by whom they have been worsted, or to her subjects to question her title by merit to rule. Rather, the admiration of the present and succeeding ages will be ours, since we have not left our power without witness, but have shown it by mighty proofs; and far from needing a Homer for our panegyrist, or other of his craft whose verses might charm for the moment only for the impression which they gave to melt at the touch of fact, we have forced every sea and land to be the highway of our daring, and everywhere, whether for evil or for good, have left imperishable monuments behind us. Another key reason that this book focuses on the case of Athens in Classical times is that the surviving ancient sources are much more enlightening about Athens than any other Greek city-state, so it is safer to draw conclusions. And although a significant portion of these sources may be considered “Athenian-centered,” research, so far, has shown that a fairly satisfactory and objective image of the functioning of the institutions of the city-state of Athens can be drawn from them. Throughout this book, it is argued that the blend of institutions and ethical rules, values and norms that applied in Classical Athens were a key parameter of its economic success. The Athenian case conveys the axiom that the relationship between institutions and the economy is reciprocal, as many scholars from a variety of economic disciplines have argued so far.4 Without institutions that safeguard several key economic principles, such as the protection of private property and free market mechanisms, economic policy cannot be effective. Furthermore, effective

6 Introduction institutions cannot ensure the prosperity of a society if the mixture of economic policy is wrong, short-sighted and not characterized by long-term orientation. I shall revert to the issue of the importance of institutions on the economy in Section 2.2. The book in hand argues that two of the most crucial qualitative elements of the success of the Athenian democratic regime were a combination of an advanced (for their era) free-market type of economic institutions that functioned efficiently under direct or participatory democracy procedures in decision-making. By focusing on various historical case studies, Economou and Kyriazis (2019) extensively analyzed the intertemporal link between efficient economic institutions, qualitative democratic governance and political stability. Such a nexus can lead to economic growth.5 To prove this, we analyzed cases from Ancient Greece, the Late Medieval Period, the Old Swiss Confederacy, England, early modern Europe, the United Provinces (Dutch Republic), the United States and France before and after the Napoleonic wars as well as modern cases from Germany, Switzerland, the European Union and the United States. To ensure that the arguments that are developed in this book are accurate and reliable to the maximum extent possible, a very extensive bibliography is provided at the end of the book, based on a synthesis of i) works of ancient Greek authors, ii) academic books, papers in international peer-reviewed academic journals and papers in collected volumes. As a final comment, although history does not provide the possibility of verification of research results through experiment, as happens in positive science, it is the basic laboratory available in the social sciences to analyze social change and progress over time to test our hypotheses and to identify the necessary causal relationships with which it is possible to apply comparative analysis to draw conclusions. My ambition in this fascinating odyssey of knowledge about Ancient Greece, focusing on the democratic Athens of classical times, is to present substantial conclusions with the aim (and hope) that some of them may be seen as useful economic policy proposals to remedy current problems at a global level. Above all, this research journey aspires to interpret the economic aspects of historical phenomena, through their objectively correct meaning. For that purpose, I keep in mind what famous nineteenth century French political philosopher and historian, Alexis de Tocqueville argued: History is a gallery of pictures in which there are few originals and many copies. Notes 1 See further the discussion in Section 2.1.2 regarding this. 2 Robinson (2011, 44–45) analyzes all cases of Greek city-states other than Athens that adopted democratic governance. It should also be mentioned that, from time to time, various researchers claim that democracy, as a political system, was not actually discovered in Classical Greece but in earlier times in areas of the East, such as in ancient Mesopotamia. Authors such as Jacobsen (1943) and his successors are responsible for this erroneous view. For reasons of space, I cannot cover this topic here, see, however, Economou and Kyriazis (2019), among others, for a critique. But it must be

Introduction  7 mentioned that a state can be called democratic only under the strict assumption that it is accompanied by strictly delimited and developed democratic institutions, such as participatory decision-making bodies, which was the case in the Athens of the time of Cleisthenes as will be further analyzed in sub-sections 2.3 and 2.4 below. An even earlier “version” of “proto-democratic” type of governance with organized politicoeconomic institutions could probably be traced back to Solon's reforms in Athens in 594 BCE. 3 The issue of the stratification of the Athenian population as an indication of socio-economic rearrangements is further analyzed in Section 9.2.2. 4 See, among others: Commons (1924), Buchanan (1954), Downs (1957), Hayek (1960, 1981), North (​1981, 1990), Bowles and Gintis (1986), Rodrik (2007), Acemoglu and Robinson (2013), Bitros and Karayiannis (2013), Hodgson (2015) and Economou and Kyriazis (2019). 5 Op cit. ftn 4. See also, among others, Alesina and Perotti (1996), North et al. (2009), as well as the extensive literature review provided by us in Georgiou et al. (2015).

Ancient Greek authors (Perseus Digital Library) Thucydides, Histories (The Peloponnesian War)

Modern Authors Acemoglu, D., Robinson, J., (2013), Why Nations Fail, New York: Crown Business. Alesina, A., Perotti, R., (1996), ‘Income distribution, political instability, and investment,’ European Economic Review, 40, 1203–1228. Amemiya, T., (2007), Economy and Economics in Ancient Greece, London, New York: Routledge. Bitros, G. C., Karayiannis, A., (2013), Creative Crisis in Democracy and Economy, Berlin, Heidelberg: Springer-Verlag. Bitros, G. C., Economou, E. M. L., Kyriazis, N. C., (2020), Democracy and Money: Lessons for Today from Athens in Classical Times, London, New York: Routledge. Bowles, S., Gintis, H., (1986), Democracy and Capitalism, New York: Basic Books. Buchanan, J. M., (1954), ‘Social choice, democracy and free markets,’ Journal of Political Economy, 62, 114–123. Commons, J. R., (1924), Legal Foundations of Capitalism, New York: Macmillan. Downs, A., (1957), An Economic Theory of Democracy, New York: Harper and Row. Economou, E. M. L., Κyriazis, N. C., (2019), Democracy and Economy: An Inseparable Relationship Since Ancient Times to Today, Newcastle upon Tyne: Cambridge Scholars Publishing. Figueira, T. J., (1998), The Power of Money: Coinage and Politics in the Athenian Empire, Philadelphia: University of Pennsylvania Press. Georgiou, M., Kyriazis, N. C., Economou, E. M. L., (2015), ‘Democracy, political stability and economic performance. A panel data analysis,’ Journal of Risk and Control, 2(1), 1–18. Hayek, F. A., (1960), The Constitution of Liberty, Chicago: University of Chicago Press. Hayek, F. A., (1981), Law Legislation and Liberty. Rules and Order, Vol. 3, Chicago: University of Chicago Press. Hodgson, G. M., (2015), Conceptualizing Capitalism: Institutions, Evolution, Future, Chicago: University of Chicago Press.

8 Introduction Jacobsen, T., (1943), ‘Primitive democracy in ancient Mesopotamia,’ Journal of Near Eastern Studies, 2(3), 159–172. Keynes, J. M. (1924), ‘Alfred Marshall, 1842-1924’, The Economic Journal, 34(135), 311–372. Lyttkens, C. H., (2013), Economic Analysis of Institutional Change in Ancient Greece. Politics, Taxation and Rational Behaviour, London, New York: Routledge. North, D. C., (1981), Structure and Change in Economic History, New York: W.W. Norton and Company. North, D. C., (1990), Institutions, Institutional Change and Economic Performance, Cambridge: Cambridge University Press. North, D. C., Wallis, J. J., Weingast, B. R., (2009), Violence and Social Orders. A Conceptual Framework for Interpreting Recorded. Human History, Cambridge: Cambridge University Press. Ober, J., (2008), Democracy and Knowledge. Innovation and Learning in Classical Athens, Princeton: Princeton University Press. Ober, J., (2011), ‘Wealthy Hellas,’ Journal of Economic Asymmetries, 8(1), 1–39. Ober, J., (2015), The Rise and the Fall of Classical Greece, Princeton: Princeton University Press. O’ Halloran, B., (2018), The Political Economy of Classical Athens: A Naval Perspective, Leiden: Brill. Robinson, E. W., (2011), Democracy Beyond Athens: Popular Government in the Greek Classical Age, Cambridge: Cambridge University Press. Rodrik, D., (2007), One Economics. Many Recipes. Globalization, Institutions and Economic Growth, Princeton, Oxford: Princeton University Press.

2

The Ancient Economy Some Further Introductory Issues

2.1 The Debate Regarding the “Backwardness” or “Modernity” of the Ancient Greek Economy The discussion regarding the “primitivist” or the “modernist” structure of the ancient Greek economy dates back to the late nineteenth century when two prominent German historians, Karl Bücher (1847–1930) and Eduard Meyer (1855– 1930), initiated a debate which, today, is known as the Bücher–Meyer controversy. Bücher viewed the ancient Greek economy as small-scale, lacking sophistication, reliant on home production and practicing self-sufficiency at the city-state level. By contrast, Meyer considered it as complex in its organization and structure – in many aspects, comparable to contemporary advanced economies. Bresson (2007, 2014, 44–45; 2016) observes that the different views between Bücher and Meyer were also related to their different ideological beliefs; the former was a proponent of the German historical school of economics, while the latter was a proponent of (British) economic liberalism. In 1893, Bücher opened the debate by arguing that the ancient economy remained stagnant at a very early stage of development, with its main characteristics being domestic production (agricultural and handicrafts), and its only goal was to meet family needs. In this respect, trade was limited, and the exchange of goods took place mainly in the context of donation, plunder and war. Physical capital or currency were almost non-existent. Finally, the division of labor was not linked to a truly organized mode of production. But Bücher's views were met with harsh denunciation almost immediately upon their pronouncement. Meyer and J. Beloch, as well as other important scholars of ancient history of the time, rejected Bücher's argument, describing his arguments as unscientific and unfounded. Meyer acknowledged that the Greek world had made significant progress from the Homeric to the Hellenistic periods (1100–31 BCE). He did not hesitate to compare the Archaic period (750–510 BCE) with the end of the Middle Ages and the Classical period with the dawn of early modern Europe (after 1549 AD). According to Meyer, the ancient economy differed from that of the present only in its magnitude. He did not doubt that the ancient Greek economy had all the characteristics of a developed modern economy, i.e., urban population, monetary circulation and the general usage of money in commercial transactions, large expansion of trade, division of labor, some ‘proto-industrial’ DOI:  10.4324/9781003434146-2

10  The Ancient Economy type of production and the desire that locally made products have access on foreign markets. This also led to commercial competition between cities. The only exception was that the scale of production was smaller.1 Since the ‘first round’ of the debate back in the end of the nineteenth century, gradually, various interpretations were added to the theoretical controversy, depending on the methodological and theoretical approach that each researcher followed. Characteristically, Hopkins (1983, xi) observed that the ancient economy is an “academic battleground” in which the contestants campaign under various colors: Marxists, modernizers, primitivists. And even within these schools of thought, different interpretations also have appeared so far. The debate continued in the twentieth century as a dispute between the substantivist and the formalist views. The former considered ancient economic affairs as lacking the element of economic rationality in economic activities. In other words, according to such an interpretation, economic activities in the ancient Greek world were “embedded” in other spheres of activity, especially politics and religion. By contrast, the formalist approach considers economic activities as independent – that the economy functioned autonomously – thus, being amenable to the methodology of rational choice. Formalists argue that Classical Athens functioned according to the basic behavioral rules of a modern economy, including utility maximization (Lyttkens 2013; Tridimas 2013, 2020; Leese 2017, 2021; Günther and Hahn 2019, 178; Bitros et al. 2020). For example, O’ Halloran (2018, 274), based on Thucydides (2.27.2–3), argues that the pursuit of self-interest lay at the heart of the mentality of the Athenian democrats, whose abiding principles were freedom and equality. Migeotte (2009, 64) adds that Athenian citizens were very conscious of the impact of the economic decisions they took. Kallet-Marx (1993) and Kyriazis and Economou (2015a, b), among others, argue that the Athenians who were participating in the Assembly, before reaching a decision on a particular issue, for example, peace or war, were well-informed and were “guided by experts.” Substantivists, on the other hand, consider economic activity in Ancient Greece as a product of social-political motivation. As Bresson (2014, 44–45; 2016) observes, the German historical school, which Bücher was a proponent of, viewed the economy as the result of institutions determined by power relationships among social groups. On the contrary, the modernist view was inspired by the free-market economic principles of classical and neoclassical economics, focusing on methodological individualism and the concept homo economicus, according to which economic agents behave as rational actors who always choose to pursue their welldefined material interest. In 1922, eminent sociologist and political economist M. Weber, in his Economy and Society, argued that in principle, commercial or industrial cities could not have existed in antiquity. Weber advocated a sociological rather than economic focus on the ancient economy. According to him, the basic free-market economic principles did not appear in Ancient Greece because citizens had no interest in developing business behavior, technology was kept at low levels and war booty instead of maximizing profits or investing in capital were the general norms.2 For Weber, only the Western capitalist economies of the nineteenth century onward

The Ancient Economy  11 were rationally managed, whereas ancient economies were ruled by institutions that had nothing to do with economic rationality and never integrated as mature market systems. Similar notions were also argued by J. Hasebroek (1933) in his Trade and Politics in Ancient Greece. However, modern research, especially in the past 30 years, has refuted such views. Authors such as Cohen (1992), Lyttkens (1997, 2013), Christesen (2003), Bitros and Karayiannis (2010), Halkos and Kyriazis (2010), Tridimas (2013, 2020), Bresson (2016), Leese (2017, 2021), Lyttkens et al. (2018), O’ Halloran (2018), Bitros et al. (2020), Economou (2020), Holler (2022) and especially Ober (2015a, 2022), with his recent important contribution The Greeks and the Rational, have convincingly argued that the difference between premodern and modern economies has been overstated and that rational choice-making is not only a product of modernity but has its roots back to Ancient Greece. G. Glotz, in his 1926 book entitled Ancient Greece at Work, had already described the existence of some key institutions which characterized the economy of Classical Athens such as banking services, the monetary system, the agricultural and handicrafts organization, property rights protection, laws against profiteering, etc. In the same year Hasebroek published his book, A. Andreades (1933) republished and updated his great treatise A History of Greek Public Finance, through which important aspects of the structure and organization of the ancient Greek economy at the public-sector level were analyzed and presented with freshness. The material provided by Andreades demonstrated the economic organization and institutions of the ancient Greek world as much more complex and important than what Weber and Hasebroek thought. Parallel to the work of Glotz ([1926], 2013) and Andreades (1933), Rostovtzeff (1936) – through a paper published in 1936 and his important book, The Social and Economic History of the Hellenistic World, published in 1941 – argued that the performance of the Greek economy during the Hellenistic period (323–31 BCE) was so high that it cannot be considered primitive, as it presented many characteristics that can be met in modern free market economies. Furthermore, Mitchell ([1940], 2014), in his The Economics of Ancient Greece, using literary and epigraphic evidence, described the main types of revenue creation in mainland Greece and the Greek islands, such as mining and foreign trade. In the next period, approximately between the late 1950s and the early 1990s, Moses I. Finley’s work had a significant impact on how the ancient Greek economy was perceived by the international scientific community. More specifically, Finley, Cambridge Professor of Ancient History, developed a substantivist theoretical model in which he argued that the ancient Greeks, when making decisions on economic matters, were bounded by criteria such as politics, family, etc. Finley’s most influential works regarding the ancient Greek economy include The Ancient Economy (1973), Economy and Society in Ancient Greece (1983) and Ancient History: Evidence and Models (1985). Finley, a Marxist-oriented historian, relied largely on a combination of Marx, Weber, Polanyi and the Frankfurt School for a significant part of his methodological analysis. Finley’s methodological approaches were fully consistent with the theoretical foundations of historical materialism.3

12  The Ancient Economy Karl Polanyi (1968, 1977), in his Great Transformation, a work of anthropological research, argued that the ancient Greek economy was “embedded,” meaning that it did not function as an independent process of social action but that whatever forms of economic activities developed were the result of social, political, religious, cultural and other reasons. In other words, there was no real economy in the way the term is understood in the modern sense – that is, a system of institutions, norms and rules of behavior that works autonomously. He believed that markets in Ancient Greece did not function under the modern capitalist concepts. But it is important to note that Polanyi (1977, 174) admitted that: the Greeks of antiquity, whose genius was already credited with giving birth to our politics, philosophy, science, and art, were also the initiators of all advanced human economy (emphasis added by the author). Polanyi also stated, We might, in contrast, sum up the Greek contribution to human economy by saying that the Greeks almost singlehandedly developed both types of economy – the market and exchange type as well as the planning and redistributive type (emphasis added by the author) – to their highest form reached up till then. Finley argued that the institutional structures of the ancient Greek world were of a non-economic nature. He believed that the ancient Greek economy had no system of independent markets and, thus, was fundamentally different from the market economy that predominates in most of the world today. It was also smaller in scale than today’s economies. Finley also argued that modern economic rationalism values such as profit maximization and individual economic initiative were nonexistent and that the ancient Greek economy was underdeveloped, characterized by a low level of capital accumulation and productivity, lacked growth and technological development and had no agricultural or industrial specialization and that long-distance trade in non-luxury items was taking place on a very small scale, etc. (Finley 1965, 1973).4 Similar views to those of Finley were developed by other Marxist authors such as de Ste Croix (1981). However, at the same time Finley was writing, but especially from the 1980s onward, his work and that of his supporters began to be strongly disputed by a plethora of scholars of different disciplines, mainly history, but also economics and political science. In chronological order these authors include:

• French who, in 1964, published a book, The Growth of the Athenian Economy,

in which he argued that rapid economic growth was achieved by the late seventh century BCE up to the Peloponnesian War. • In 1968, R. Bogaert published Banques et Banquiers dans les Cités Grecques regarding banking services in Greek antiquity. • In 1973, E. Cohen wrote Ancient Athenian Maritime Courts in which he analyzed a plethora of commercial cases known as dikai emporikai, mostly related

The Ancient Economy  13 to maritime commerce in which specially trained judges decided complex commercial cases that required special handling, knowledge and experience to be carried out efficiently. Furthermore, many authors, such as Thompson et al. (1973), Stroud (1974) and Kleiner (1975), provided evidence regarding mining procedures and the minting of coinage.5 Schaps (1979), in his Economic Rights of Women, argued that although women in Greek antiquity had no political rights, they did have recognized economic rights, even if they were not equal to those of men. This view is consistent with that of Pomeroy (1995) whose research has focused on the social status of women in Greek antiquity.6 In 1977, Chester G. Starr, with his important contribution The Economic and Social Growth of Early Greece 800–500 B.C., strengthened the previous arguments of Glotz, Andreades, Mitchel, Rostovtzeff, French and Cohen that economic growth did appear in Ancient Greece from the Archaic period onward. In addition, Burke (1985) published a paper with evidence that public finance mechanisms that were adopted during the era of Lycurgus (in the late forth century BCE) were much more sophisticated than had been thought earlier. He came with two follow-up papers in which he further convincingly elaborated his previous argumentation (see Burke 1992, 2010). Cohen’s (1989, 1990) papers regarding maritime yield and commercial lending by Athenian banks provided further evidence of the complexity and the sophisticated nature of the Athenian financial system. P. Millet wrote a book in 1991, Lending and Borrowing in Ancient Athens, in which he admitted that lending and borrowing existed in Classical Athens but, following the Finleyan tradition, he believed that the role played by credit was very different from its familiar role in a capitalist society. Such a view, in principle, was refuted in E. Cohen’s seminal contribution, Athenian Economy and Society: A Banking Perspective, a breakthrough book in the field, published in 1992, in which he persuasively and splendidly proved that the Athenian financial system’s structure was based on a plethora of sophisticated banking services that played a key role in the development of Athens’ international commercial orientation. Morris (1994, 2004) accepted the main core of Cohen’s (1992) arguments and persuasively provided further arguments that economic growth was, indeed, achieved during the Classical period. Further arguments regarding this are provided by authors who are cited analytically in Table 2.1. Cohen’s book was a seminal contribution to the bibliography, as after its appearance, a new dynamic trend began to develop favoring the “modernist” or “formalist” character of the ancient Greek economy. Throughout the 1992–2022 period, the literature published overwhelmingly supports the “formalist” approaches, while the views of M. Finley and his followers have declined significantly, to such an extent that they are now considered almost completely obsolete, at least in many of their aspects. Based on a plethora of persuasive findings in current research, it appears that the view that the ancient Greek economy, as a whole, was based on rudimentary institutions and organization should be abandoned – at least, as far as Athens of the Classical period is concerned. Thus, although Reibig (2001)

14  The Ancient Economy Table 2.1 Economic/fiscal institutions in Classical Athens Economic Institutions (in general)

Authors

Organized markets

Cohen (1992), Amemiya (2007), Bitros and Karayiannis (2008), Engen (2010), Halkos and Kyriazis (2010), Bresson (2014, 2016, 2022), Leese (2017, 2021), Bitros et al. (2020), Bresson (2022) Economou and Kyriazis (2014, 2017, 2019) Ober (2008), Bitros and Karayiannis (2013), Economou and Kyriazis (2017), Bitros et al. (2020), Economou et al. (2021a,b), Halkos et al. (2021), Bresson (2022) Burke (2010), Bitros et al. (2020), Halkos et al. (2022)

Property rights protection Laws against profiteering Public–private partnerships (3P) Handicrafts and services sectors Entrepreneurship for profit making International commerce

Harris (2002), Halkos and Kyriazis (2010), Acton (2014, 2016), Bresson (2016), Jew (2022) Bitros and Karayiannis (2008), Johnstone (2011), Roberts (2011), Leese (2017, 2021). Engen (2010), Amemiya (2007, 80–91), Bresson (2016), Harris and Lewis (2016), van Alfen (2016), O’ Halloran (2018), Bitros et al. (2020), Economou et al. (2021a,b), Halkos et al. (2021), Bresson (2022) Technological progress Lazos (1998), Greene (2000), Acton (2014), O’ Halloran (2018), Sherwood et. al (2020) Agricultural organization Harris and Lewis (2016), Bresson (2016), Izdebski et al. (2020), Fachard and Bresson (2022) Taxation policy Gabrielsen (1994, 2013), Lyttkens (2010, 2013), Fawcett (2016) Fiscal policy (public finance Samons (1993, 2000), Lyttkens (1997), Amemiya (2007, and administration) 90–103), Kaiser (2007), Kyriazis (2009), Burke (1992, 2010), van Alfen (2011), Pritchard (2012, 2014, ​2015), Rhodes (2013), van Wees (2013), Economou and Kyriazis (2016), Bitros et al. (2020) Economic growth and wealth French (1964), Starr (1977), Morris (1994, 2004), Bitros increase and Karayiannis (2010), Halkos and Kyriazis (2010), Ober (2010, 2011, 2015a,b), Harris (2016), Taylor (2017), Carugati (2019), Carugati et al. (2019), Bitros et al. (2020), Ober and Scheidel (2022) Economic equality Ober (2010, 2017), Taylor (2017), Ober and Scheidel (2022) Social welfare state Bitros et al. (2020) Standard of living/household Loomis (1998), Ault (2007), Bresson (2016), Economou quality et al. (2023).

believes that the Bücher–Meyer controversy has remained inconclusive, the rate of publication of academic articles and books that support the “modernist” trend is ever-growing, a fact which illustrates the need for a substantial revision of many of the hypotheses regarding the “primitiveness” of the institutions of the ancient Greek economy.

The Ancient Economy  15 This is testified in the opinions of some prominent scholars in the field, including Cohen (1992), who notes M. Finley’s historical dogmatism, which, unfortunately, instead of retreating over time, has increased in intensity. Morris (2002, 10) adds that Finley’s wider methodological framework dates back to the 1940s and 1950s and, today, no longer offers an effective interpretation of the ancient Greek economy. Morris (2004) rejects Finley's argument that economic models cannot be applied as effective methods of interpretation of the ancient Greek economy. He further argues that an important approach for a more accurate view of the ancient Greek economy is provided by the New Institutional Economics (NIE) school of thought. And Gauthier (2022, 295), in a recent illuminating paper, explains further this new trend which connects economic analysis to history through NIE. 2.1.1 Implementing the New Institutional Economics Interpretative Tools and Concepts in the Case of Classical Athens

Lyttkens (2013) considers that the application of the NIE in the case of Athenian democracy is a very good methodology for three main reasons: i) it helps explain what went on in ancient times, ii) the lessons regarding institutional change are often applicable to the modern world and iii) we learn more about the potential and limitations of economic theory. In general, it is considered that many of the methodological concepts that derive from the NIE can provide robust explanatory power in terms of efficiently interpreting historical facts that are related to economics. NIE methodological concepts are used in modern literature not only by economists, such as Amemiya (2007) and Lyttkens (2010, 2013), but also by historians and political scientists, such as Manning and Morris (eds) (2005), Bresson (2007, 2014, 2016), Ober (2008, 2010, 2011, 2015a), Mackil (2013), Lewis (2018), Manning (2018), O’ Halloran (2018) and Carugati (2019). Von Reden and Kowalzig (2022), from a classicist–historian standpoint, analyze the importance of NIE as a highly promising methodology to effectively interpret and explain historical phenomena. The NIE methodological approach also plays a key role in this book. On the importance of NIE in the analysis of ancient economies, the ancient Greek in particular, Frier and Kehoe (2008) write: By such methods, we can also hope to grasp the deeper implications of the question: how, on the modern understanding, economic and institutional development came to be, and remained codependent. (p. 114)…No economy can function without principals and agents, and recent work in New Institutional Economics sheds light on how ongoing relationships between principals and agents operated in the Greek and Roman worlds. (p. 128)…Above all, NIE affords us the opportunity to reconsider institutional aspects of the ancient economy that may initially strike us as bizarre or even counterproductive. NIE offers us an array of tools for taking a closer look. From such research it may emerge – indeed, in numerous instances it predictably will emerge – that many curious economic institutions of the Greek and

16  The Ancient Economy Roman world were, at least in their origins, the consequence of individuals struggling rationally (within their lights) to maximize their personal gain. To the extent that this is true, the “invisible hand” of Adam Smith should no longer be counted as generally missing from the ancient economy. Only, the hand was made flesh. (pp. 142–143). Morris (2004), Bresson (2007, 34), Ober (2010, 2011, 2015a) and Kyriazis (2012), among others, argue that the great reorganization of the ancient Greek society and economy after the collapse of the Mycenaean world (1600–1100 BCE) began no later than the end of the Archaic period and was part of a broader process that had begun earlier during the Dark Ages (1100–750 BCE). Derks (2002, 600) writes that it is important to look for an answer to the question as to why researchers like Finley stuck to an opinion which, even in their own time, had already been shown to be mistaken. For Derks, another related issue is the difficult task of shedding Finley’s heritage, a problem which seems a test-case for Classical studies in general for getting rid of the still very dominant nineteenthcentury traditions in all disciplines. Greene (2000, 29–30) characterizes Finley’s (1965, 1973) interpretations regarding the technological and economic achievements of the ancient Greek and the Roman economies as minimalist and dismissive of the historical evidence. Lazos (1998), Acton (2014) and Sherwood et al. (2020), through their exceptional contributions, provide persuasive evidence that, in actuality, significant technological breakthroughs took place during the Classical but mainly the Hellenistic period. Van Wees (2013, 11–12) adds that the trend in recent scholarship has been to see more complex economic systems emerging at certain times and places as well as a more extensive role of government in economic life. This is consistent with Bresson (2016, 13) who adds that, among the very diverse societies on which Polanyi concentrated his efforts, there was one that interested him particularly: Ancient Greece. Bresson writes that Polanyi was surprised to observe a phenomenon that was unexpected in his theory: the constitution of a market system undergoing fluctuations in prices for products made for mass consumption and extending over vast geographical areas. Bresson adds that Polanyi (1977) was wrong to locate the “disembedding” of Greek society at the beginning of the Hellenistic period because, in reality, great changes in the society and economy of Ancient Greece had already been underway since at least the end of the Archaic period and were situated in a line of development that began with the Greek Dark Ages. Canevaro (2018) adds that a few years ago, the consensus was that the Greek city-states were characterized by primitive economies managed by a political class of dilettantes, but this picture is now radically changed, with historians such as Ober (2015a, b), Harris and Lewis (2016) and Bresson (2016) showing the high level of sophistication of economic activity and of the institutional framework that underpinned it. Engen (2010), O’ Halloran (2018) and Tridimas (2019) acknowledge that, during the 1970s and 1980s, Finley’s view was the established orthodoxy, but

The Ancient Economy  17 in light of new evidence and advances in economic theory, formalist accounts have gradually won ground. These findings have called Finley’s model into question and it now must be acknowledged that the ancient Greek economy was much more complex and dynamic than previously realized. What is also important is that the formalist approaches can be efficiently applied as a methodological concept not only for Ancient Greece but also to Ancient Rome. For example, in his important work, The Roman Market Economy, P. Temin (2012) used economic theory to demonstrate the Roman Empire’s regional specialization, division of labor, long-distance trade, economic prosperity and monetary integration among the regions of the empire. Supportive to the argumentations of Temin regarding the Roman economy are, among others, two collective volumes, edited by Scheidel et al. (2008) and Verboven (2021), in which modern methods of interpretation such as NIE are used, as already discussed above. Thus, the majority of scholars in the past 30 years have convincingly argued that the Athenian state implemented in practice much more advanced economic institutions than the primitivists thought. This is also verified by the papers of two recent volumes: The Cambridge Companion to Ancient Greek Economy, edited by S. von Reden (2022), and the earlier excellent volume The Ancient Greek Economy: Markets, Households and City States, edited by E.M. Harris, D.M. Lewis and M. Woolmer (2016), in which Harris et al. (2016, 8) characteristically write that: In the past fifteen years, however, some ancient historians have shown a willingness to pay more attention to the role of markets in the economy of the ancient Greek polis. Mackil (2013, 238) adds that: Finley’s substantivist model has been gradually discredited by specific arguments, historians have begun to return to questions of political economy and the intervention of states in economic activities. This also means that older views, such as those of Austin and Vidal-Naquet (1977, 8), who argued that the very idea that “the economy” in the modern sense being untranslatable in Greek “because it simply did not exist” should be significantly revised based on the important findings of the international literature in the past 30 years, much of which has already been mentioned in this section. At this point, as proof of the above claims, Tables 2.1 and 2.2 include a significant part of the academic literature that is related to various economic institutions that were practiced in the Athenian economy of the times. In the following chapters, I elaborate on the findings of the authors in Tables 2.1 and 2.2 from an economist’s point of view, connecting them with modern evidence and economic theory. In general, this discussion is also related to the essence of the definition of the word economy, and what it meant in Classical times in relation to now. According to Samuelson and Temin (1976, 3), economics consists of the study of how people and society end up choosing with or without the use of money,

18  The Ancient Economy Table 2.2. Financial/monetary institutions in Classical Athens Financial Institutions Authors Role of money and monetary policy Mining/currency production procedures Measures against counterfeit coins

Banking services Insurance services Joint Stock Companies

Figueira (1998, 2003), Schaps (2004, 2008), von Reden (2010), van Alfen, (2011, 2022), Bitros et al. (2020), Economou et al. (2021a,b), Economou and Kyriazis (2021) Aperghis (1998), Figueira (1998), Christesen (2003), van Alfen, (2011, 2022), Bresson (2019), Bitros et al. (2020), Economou and Kyriazis (2021), Economou et al. (2021a,b). Martin (1991), De Callataÿ (1996), Figueira (1998), Kosmetatou (2002), Rhodes and Osborne (2003) Engen (2005), Ober (2008), Psoma (2011), Bitros et al. (2020), Economou et al. (2021a,b), Economou and Kyriazis (2021), Halkos et al. (2021) Cohen (1990, 1992), Shipton (1997), Halkos and Kyriazis (2010), Bitros et al. (2020) Cohen (1992), Acton (2014) Cohen (1992), Christesen (2003), van Alfen (2011), Acton (2014), Bitros et al. (2020)

to employ scarce productive resources that could have alternate uses to produce various commodities and distribute them for consumption, now or in the future, among various persons and groups in society. Economics also analyze the costs and benefits of improving patterns of resource allocation. By contrast, due to the definitions of the word economy by Lysias (Ag. Er., 7), Aristotle (Oec.) and Xenophon (Oec., 1.13, 2.12, 6.14. etc.), scholars such as Cartledge (2002, 157), Ault (2007, 259) and Leshem (2016) argue that the word oikonomia in Ancient Greece did not have the same meaning it does today. The word was a derivative of two words, oikos and nomos, meaning “household” and “law,” respectively. According to modern interpretations of ancient authors’ views on the definition of economy, the latter was related to household economy and household management. A further definition of economics belongs to Aristotle, who considered economics to be the collection and use of material goods that make up wealth. Based on this interpretation, Leshem (2016, 225) argues that the ancient interpretation of the word is not related to the concept of financial budgeting and, therefore, is not related to modern economics. But if one carefully reads Xenophon’s work Oeconomicus, he/she will notice that an ancient household did not only mean the house in which a couple lived but also the number of slaves, animals, estates and agricultural and non-agricultural equipment that made it up. This is because, during the Classical period, the Athenian oikos (household) was also a part of the production of goods and services that could be sold in the Athenian marketplaces, through money exchanges between sellers–producers and buyers. This was taking place because household autarky could not be satisfied. The expanded network of needs for goods and services could only be satisfied through buying products in organized markets. That’s why Kallet (2007, 72) correctly argues that, in reality, the word oikonomia not only

The Ancient Economy  19 meant house management but also, in wider sense, the proper economic management of the state and, by extension, the ability to increase the prosperity of the polis. Acton (2014, 47) writes that the Athenians of the Classical period acquired most of their manufactured possessions from third parties. Even the richest citizens (as consumers) did not have many of the goods they needed through the productive means of their households and their slaves. In any case, the ancient definition of the word economy yielded only a subset of the comprehensive interpretation of the term as used internationally today. 2.1.2 The Issues of Historical Anachronism and Economic Rationality in the Case of Classical Athens

There are various authors, including (of course) the primitivists, who still believe that the study of Classical Greece, in general, and Athens, in particular, offers very little (or nothing at all) in the interpretation of modern economies because, they argue, the economic activity in preindustrial societies was very different from that of today, and because of this, “we cannot use modern economic analysis for interpreting the past.” According to them, any such logic is prone to historical anachronism – that is, the adoption of the social, political, or cultural assumptions of one era to interpret or evaluate the events and actions which had its own characteristics. Due to such an approach, a portion of social scientists, in general, and historians of antiquity, in particular, do not expect their readers to use their publications as a “guidepost” for public policy; their objective should only be to provide information and understanding past events. To my point of view, there are two points that question the absolute veracity of such an approach, in terms of historical research methodology. First, there is a plethora of eminent scholars and philosophers who do not accept this. For example, one of the most prominent pioneers regarding the study of the ancient Greek economy, Eduard Meyer, was a proponent of the view that specific economic structures might resurface at a later point in time. According to Meyer (1910, 188), the Homeric period was directly comparable to the European Middle Ages, whereas the Classical period (Greece and Late Republican/Early Imperial Rome) corresponded to the early modern European period. Second, authors such as the eminent economist J. Schumpeter ([1954], 2006, 10–11) believed that, in order to better understand the economies of today, we also need to study carefully those of the past to potentially gain experience today. It is also worth noting that Schumpeter (p, 49) accepted that the history of economic analysis begins with the ancient Greeks, even if at a rudimentary level (pp. 53–54). Having the above in mind, this book analyzes a plethora of economic institutions, such as property rights protection, banking services, insurance and mortgages by acknowledging that such institutions present differences regarding the ways they functioned between ancient times and today. But it also accepts that any alternations or evolution in the nature of these institutions in the course of history does not necessarily make any comparison between historical periods impossible or insignificant.

20  The Ancient Economy After all, Euripides advised us that “happy [is] the man who has gained knowledge through history.” Lord Byron adds: “The best prophet of the future is the past,” and Abraham Lincoln declared: “Fellow citizens, we cannot escape history.” It is also worth noting that the Founding Fathers of the United States, John Adams, John Madison, Thomas Jefferson, etc., were deeply influenced by the political texts of the ancient Greek writers (Plato, Aristotle, Plutarch, Polybius and others) in fashioning the final version of the US Constitution in 1787. For example, in their Letters from a Pennsylvanian Farmer, John Adams and John Dickinson discussed the political organization of Sparta. They had studied the Persian Wars, read Plutarch’s biography of Pericles and examined the Delian League and the other Greek alliances. Adams, Hamilton, Dickinson and others had delved into the history and nature of the Athenian democracy (Richard 2009, 31–32, 47, 79–84). Also, the Founding Fathers, such as Hamilton and Madison, expressed a particular interest in the federalism of Ancient Greece, focusing on the Achaean Federal League (Economou 2020). Thus, what is sure is that the Athenians during the Classical times had developed and implemented in practice numerous remarkable economic institutions (as those analyzed in Tables 2.1 and 2.2 and Chapters 3–10), containing many elements of what are today characterized as modern free-market economy mechanisms. Throughout this book, I reproduce all the relative discussion. Under such a context, this book also accepts – what I believe to be – the correct reasoning that when, for example, an ancient source or an archaeological inscription describes obvious economic institutions, that their true and intertemporal meaning cannot be disputed, anyone who accepts this he/she should not be blamed for historical anachronism. For example, if one cautiously reads Plato’s Laws (12.953e), he/she will notice that Plato refers to the issue of a written contract, while Demosthenes (Ag. Zen., 32.21) describes an incident of cargo ship insurance due to a naval accident. For bank lending regarding maritime commerce, one can read Demosthenes (F. Ph., 34.1–2 and Against Dionysodorus, 56.1–2).For the legal securing of lenders against a breach of loan repayment terms, one can read again Demosthenes (Ag. Lac., 35.1–5). Demosthenes also provides us with a clear definition of the major purpose of a bank: the bank is a business yielding a hazardous revenue from money which belongs to others. (Dem., F. Ph., 36.11, reproduced by Lyttkens (2013, 121) and Bitros et al. (2020, 29)). In the course of our analysis, reference will be made to a multitude of such sources/ passages that describe obvious economic concepts. Such a methodological approach gives “research flexibility” to any relevant analysis of the ancient Greek economy in the following sense: it disconnects a researcher’s commitment from the process of obligatory subordination of his/her research in the context of specific ideological and methodological dogmas, for

The Ancient Economy  21 example, Marxist-oriented approaches regarding the status of the ancient Greek economy. The point raised here is consistent with Derks’s (2002, 597 and ftn. 2) and Migeotte’s (2009, 6) view. Taking this into account, this book accepts and adopts the very essence of two very important contributions: those of T. Amemiya’s (2007) Economy and Economics of Ancient Greece and C.H. Lyttkens’ (2013) Economic Analysis of Institutional Change in Ancient Greece. Both convincingly argue that economic analysis and modern methodological tools and concepts on economics can be applicable to the case study of Ancient Greece. Tridimas (2013, 2020), Acton (2014), Bergh and Lyttkens (2014), Lewis (2018), O’ Halloran (2018), Bitros et al. (2020), Izdebski et al. (2020) and Leese (2021), among many others, accept this approach by providing further supportive and persuasive arguments. Bresson (2016, 345) characteristically writes that economic analysis allows us to account for a number of phenomena observed in Ancient Greece. Throughout this book, I adopt such tools and concepts, as in Sections 3.2, 3.5. 5.2, 5.6, 7.6, 9.1 and 9.2.1, by using them carefully (to avoid historical anachronism and other methodological problems) through the lens of the NIE. Another important issue which is connected to the above discussion and also requires clarification from the very beginning is that, throughout this book, I do not claim that the ancient Athenian economy was a capitalist one. This term characterizes only the economies since early modern Europe and later on. But, on the other hand, to argue that the Athenians, in their daily practices in the market, did not understand at least the basic logic of capitalistic principles, such as profitmaking when performing commercial transactions, is a gross exaggeration. The evidence I provide, especially in Chapters 5–7, refutes such allegations and coincides with the findings of prominent researchers in the international community today. For example, Lewis (2018, 16) notes that Finley was well acquainted with the textual evidence from Attica (such as Finley (1970)) and knew that some kind of profit-maximizing behavior did exist, and this is what Aristotle was talking about when he analyzed chrematistike. And in a recent important book, Leese (2021) argues that the existing evidence overwhelmingly demonstrates that ancient Athenians did achieve long-term profits, wealth maximization and continuous reinvestment of these profits into additional productive enterprises, as happens in a modern industrial–capitalist system. As described by a plethora of authors such as Halkos and Kyriazis (2010), Harris and Lewis (2016), Woolmer (2016), Bresson (2016, b), van Alfen (2016), O’ Halloran (2018), Bitros et al. (2020), Economou et al. (2021a, b) and Halkos et al. (2021), Athenian local and long-distance trade functioned through market mechanisms. Readers interested in the subjects dealt with in this book will find that methodological approaches such as NIE and rational-actor models have been gaining ground over the past three decades among eminent economic historians and classicists, such as (in alphabetical order), Andreas Bergh, Alain Bresson, Edmund M. Burke, Paul Cartledge, Federica Carugati, Edward Cohen, Elio Lo Cascio, Thomas

22  The Ancient Economy J. Figueira, Bruce Frier, Robert K. Fleck, Henrik Gerding, Andrew Hanssen, Edward M. Harris, Dennis Kehoe, Barbara Kowalzig, David Lewis, Emily Mackil, Andrew Monson, J.G. Manning, Ian Morris, Josiah Ober, Athanassios Pitsoulis, Richard Saller, Walter Scheidel, Peter Temin, Hans van Wees, Sitta von Reden and Mark Woolmer, especially when particular ancient texts describe economic ideas or concepts expressed by ancient writers, such as Xenophon, Aristotle, Plato and Demosthenes, that are so clear in their interpretation that the possibility of misunderstanding their true meaning is very weak, and therefore, the conclusions are (quite) obvious.7 Of course, there is also an important limitation to be taken into account. Although this book accepts that, as a general principle, the Athenians were making economic decisions based on rational choice, it also acknowledges that, seeing the Athenians’ overall economic behavior under a homo oeconomicus perspective, possesses some limitations, just like in modern societies. So far, various authors from various disciplines have criticized the homo oeconomicus behavior. For example, Akerlof and Shiller (2009), inspired by J.M. Keynes’s animal spirits concept have argued that the homo oeconomicus behavior is difficult to apply in practice, especially when instincts, proclivities and emotions influence human behavior. H. Simon (1982, 1991) developed the bounded rationality concept, which supports that citizens or people as economic agents and consumers are not totally rational in their choices in the sense that, in practice, they do not always seek to maximize the benefit they enjoy from a good or service.8 In addition, Thaler and Sunstein (2008) and Thaler (2015), through a Behavioral Economics perspective, make a distinction between “econs” and “humans” in which the former are rational actors – that is, people – who make optimal choices based on calculated costs and benefits, whereas “humans,” – who consist the vast majority of people – when making decisions, in practice, are influenced by factors such as emotions, impulses and shortsighted acts and, this, undermine their overall judgment under a rational choice perspective. I believe that the above limitations apply also for the case of Classical Athens, in particular, and Ancient Greece, in general. 2.2. The Relationship between Economics and Institutions: Path Dependence and Institutional Change This section highlights the importance of the relationship between the economy and institutions and their role in the success of an economy. According to Knack and Keefer (1995) and Rodrik (2007), institutions are powerful determinants of economic growth even if, according to Glaeser (et al. 2004), there is a dispute among scholars as to the degree of influence of institutions on economic growth. The Old and New Institutional School of Economics9 have given several definitions for the interpretation of institutions. A view of the New Institutional School of thought on institutions is attributed, among others, to Nobel Laureate Douglass C. North (1990, 3–5) who characterized institutions as:

The Ancient Economy  23 rules of the game in society or, more formally, the humanly devised constraints that shape human interaction…The purpose of the rules is to define the way the game is played. But the objective of the team within that set of rules is to win the game. Hodgson (2006) argues that institutions are systems of established and embedded social norms based on social interactions. North (1981, 1990) adds that the constraints imposed by institutions can reduce information costs regarding the enforcement of a range of social practices. Therefore, the role of institutions is to reduce i) the cost of human interaction compared to a world without institutions and ii) the uncertainty that arises when specific situations take place (North 1990; Bresson 2016, 19–30). The keyword “restrictions” implies that the acceptance of certain rules of conduct (e.g., “I cross the road when the traffic light is green and the opposite, I do not make noise during quiet hours,” etc.) actually limits unrestricted action or delinquency (for example, “I smoke when a pregnant woman is sitting next to me, without considering whether this behavior harms her”). North, therefore, describes institutions as the generally accepted rules that are related to the organization of a society. Institutions of a society are vital for the implementation of its economic policy, for its prosperity or failure, but also for any kind of wider social activity. In essence, markets cannot function effectively without a satisfactory institutional framework (North 1981, 1990). Institutions generate incentives for human action and communication, politically, socially and economically (North 1990, 3, 6; 1991). Hodgson (2001, 295) argues that institutions are a consistent set of rules of conduct that guarantee the cohesion of the social system. They are divided into formal (justice system, political system, business rules, trade unions, government agencies, local government, schools, etc.) and informal (ethical and customary rules, social and religious as well as cultural values, routines and habits). North and Thomas (1973) and North (1990) further argue that institutional change shapes the way societies evolve over time; thus, institutions are the key to understanding the changes that take place throughout history. Inadequate institutions are uprooted, while effective ones survive (Halkos et al. 2022). Institutions, therefore, highlight the social structures and values of a society in each historical period and contribute to the stability of human behavior and the effectiveness of the economic system. In the course of this book, it will be shown that a key element of the economic success of the Athenian state in terms of economic policy was that it introduced a series of efficient and functional institutions as rules and codes of behavior, according to the definition of Hodgson (2006, 2015), which the society accepted as social norms that could lead to its prosperity. Thus, the fact that some societies experience long-term stagnation or reduced economic prosperity depends on the very nature of their institutions (Acemoglu and Robinson 2013). This discussion relates to the issue of path dependence, which concerns the gradual creation of a grid of values in ​​ a society in the form of customs and traditions which, when they are consolidated into a coherent whole, are difficult to

24  The Ancient Economy change because they become commonly accepted and repeated behavioral patterns of social life. Over time, these values are “locked in” by historical events, and they create norms and rules of conduct that can hardly be changed (David 1985; Arthur 1989). North (1990) applied the concept of path dependence to institutional theory. A characteristic historical paradigm of such is related to Sparta versus Athens during the Classical period. When a model of social organization is adaptive to change, such as that of Classical Athens, as will be further explained in the following chapters, it rewards and encourages competition to adopt successful and efficient institutions. This is a positive development because competition uproots inferior institutions, rewarding those that deal effectively with the real preferences of the people (Halkos et al. 2022). To clarify the concept of an “adaptive” and “flexible” society as opposed to one characterized by rigidity and little potential for institutional change under normal circumstances, I cite here some examples: i) democratic Athens in contrast to the less adaptive Sparta or the absolutist Persian Empire; ii) the United Provinces and England versus the Spanish Empire and the Ottoman and Mughal Empires of India in early modern Europe; iii) the United States versus the Soviet Union during the Cold War and iv) today, cases such as the United States, Switzerland, the United Kingdom or the European Union, which are open societies, against countries such as Iran, Afghanistan, Somalia, Sudan, Zimbabwe, North Korea or Yemen, countries in which the authoritarian mentality prevails and there are blatant human rights violations, corruption is rampant and the regime is secretive, as shown in the international press. In some cases, to make a radical change to a regime that is characterized by path dependence, there must be some specific reasons. It might be a social or national revolution occurring, such as in the United Provinces after 1568, the United States in 1776, France in 1789, Russia in 1917 and China in 1949. Modern institutional theory argues that states characterized by liberal institutions can more easily adapt to new institutions or that the evolution of the existing ones into new forms is easier, with the ultimate goal to achieve economic growth in the long run (La Porta et al. 2008; Acemoglu and Robinson 2013). Such a regime is characterized as an open access society, according to the definition provided by North et al. (2009). According to them, an open access society meets the following criteria:

• Entry into economic, political, religious and educational activities is open to all citizens as long as they meet standard (impersonal) requirements.

• The state supports organizational forms that are open to all citizens. • Rule of law is enforced impartially for all citizens. • The state has a monopoly on violence – potential and actual. Under such a perspective, Carugati (2019) argues that these open access set of institutions did apply in Classical Athens in many relevant respects. In the case of preClassical Greece, a package of democratic values and other factors that influence behavior, such as equality before the law, political equality, freedom of speech, protection of property and civic rights, were under development and were transferred

The Ancient Economy  25 from generation to generation, through teaching and imitating knowledge, from the Homeric period (1100–750 BCE) onward. In Kyriazis and Economou (2015a) and Economou and Kyriazis (2017, 2019), we describe this system of “proto-democratic” values that led to the socio-economic and political regime/institutional change in Classical Athens as a democratic macroculture. As will be explained in the next sections of the present and following chapter, due to the reforms of Themistocles that led to the gradual development of commercially oriented institutions (related to maritime economy) from the Archaic period onward, the Athenians managed to effectively respond to an external shock – the second Persian invasion of the period 480/479 BCE into mainland Greece – by “turning to the sea.” Lyttkens (2013, 3) adds that the Archaic and Classical periods in Ancient Greece are fascinating in that seldom in human history was the degree of change so dramatic.10 Bresson (2014, 48) adds that Ancient Greece presents the characteristics of an exceptionally dynamic society and economy in which remarkable, intensive growth took place based on a highly favorable institutional framework, division of labor, extensive trade, radical improvements in financial and contracting practices and technical innovations. I analyze all these issues in the following chapters. Table 2.3 provides a brief analysis regarding the main socio-political developments of the period 508–322 BCE in Athens. This helps to better understand the nexus between the political and economic institutions that are analyzed in the following chapters more extensively. Based on this, Table 2.4 represents a series of important institutional changes (of socio-economic and socio-political nature) that took place in Athens since Solon’s reforms of 594 till 322 BCE. Explanations regarding Column 3 are further provided throughout the book. By contrast, states that are characterized by absolutist institutional structures, such as the Persian Empire or the French Ancien Régime between the fifteenth to eighteenth centuries AD12 or Iran and North Korea today, may not introduce the proper institutional changes when required and, thus, may not manage to effectively handle a severe challenge, an external shock, for example, a military invasion. Such regimes, according to A. Toynbee’s A Study of History (especially Vols. IV–VI) will probably collapse (Toynbee 1951). Figure 2.1 illustrates two different scenarios of a reaction to an external shock, such as a war. In Path 1, the regime adapts and accommodates the external shock – that is, its institutions survive either by transforming or evolving themselves. This is what happened in Classical Athens before and after the Persian invasion and in Elizabethan England before and after the invasion of the Spanish Armada in 1588. On the other hand, in Path 2, the regime fails to adapt, oscillations gradually increase over time, instability increases and, in the end, the regime breaks down. This is the case of Sparta (see Halkos et al. 2022) and the Soviet Union during the Cold War in which, despite the efforts of the last General Secretary of the Communist Party, Mikhail Gorbachev, to successfully introduce large-scale institutional changes to the regime through radical reforms – perestroika and glasnost – lasting from 1985 to 1991, the reformist trend failed and the Soviet Union collapsed.

26  The Ancient Economy Table 2.3 Main socio-political developments of the period 508–322 BCE in Athens Year

Historical Fact

Details

508 Cleisthenes’s reforms 483/482 Themistocles’s Naval Decree

Cleisthenes establishes democracy. Athenians are persuaded to invest in favor of the public good defense by shipbuilding trireme warships. 480/479 Greco-Persian Wars Greeks stop the advance of the most powerful military force in the known world: the Persian Empire. 478 First Athenian Alliance The Athenians take a leading role in the defense of more than 300 allied city-states throughout the Greek world. 462 Ephialtes’s and Pericles’s All citizens (regardless of class) are eligible for all reforms public offices. 431–404 Peloponnesian War Death of Pericles in 429. The gradual erosion of Athenian power commences. 411/410 Oligarchy A short-lived oligarchic regime is established in Athens. 404 Athens’ defeat and Geopolitical decline and great losses in manpower. oligarchy Establishment of a short-lived oligarchic regime. 403 Restoration of Introduction of payment (ecclesiastikon) for attending democracy the popular Assembly meetings. 357–355 Athens and Social War The retreat of Athenian power. Military capability is severely limited, and public revenues are shrinking sharply. 354–340 Athens adopts a pacifist The Athenian state abandons war strategy; defense grand strategy spending is replaced by public works. 339–338 Athens returns to war Conflict with Macedon. strategy 337–323 Athens re-introduces a Defense spending is replaced by public works. pacifist grand strategy 322 Athens returns to war Athens is defeated in the Lamian War and at the strategy naval battle of Amorgos. Geopolitical decline follows, and Athens forever loses its hegemonic position in Greek affairs to other nations such as Thebes and Macedon.

Path 1 leads to the ideal level of institutional change. After the external shock (at time t = 0), Path 1 comes back to the (optimal) ideal level of institutional change at time t = t*. On the other hand, Path 2 never leads to the mean line path, leading the political regime to chaos. The following equations give Paths 1 and 2:

Path – 1 : a + b · t + t0.5 · sin (c – d/ (e + t2))

(2.1)



Path – 2 : a + b · t – t1.1 · sin (c – d/ (e + t2))

(2.2)

Herodotus (5.78.1) explains why an authoritarian system of governance can become disastrous for a nation by analyzing the notorious case of King Croesus

The Ancient Economy  27 Table 2.4 Key institutional changes taking place in Athens between 594 to 322 BCE Reforms

Date / Period Historical Outcome (BCE)

Solon

594

i) Debt abolishment. Those who had been enslaved for failure to pay their debts were freed. ii) (■) Cleisthenes11 508/507 (■) Themistocles 483/482 Themistoclean shipbuilding program. Further developments regarding (♦) and (■) are taking place. Ephialtes and 463/462–431 Further developments regarding (♦) and (■) are taking place. Pericles Eubulus and 355–322 Further developments regarding (♦) and (■) are taking place. Lycurgus Explanations: (♦) Introduction of vast fiscal expansionary programs of public works. (■) Institutional changes through democratic reforms are taking place.

regime

External shock

Mean path Path 1 Path 2

Path 2

Mean path

Path 1

Optimal rate of change point time (t) t*

t

Figure 2.1 External shock and an institutional change of a regime

of Lydia. In contrast to authoritarian rule of governance, Herodotus argues that a cooperative system of decision-making, such as the Athenian one, imbued by the principle of isegoria (see below), limits the chances of making strategically wrong choices. He persuasively writes: the Athenians grew in power and proved, not in one respect only but in all, that equality is a good thing. Evidence for this is the fact that while they were under tyrannical rulers, the Athenians were no better in war than any of their neighbors, yet once they got rid of their tyrants, they were by far the

28  The Ancient Economy best of all. This, then, shows that while they were oppressed, they were, as men working for a master, cowardly, but when they were freed, each one was eager to achieve for himself. The other critical element is when institutions tend to become “ossified” – that is, are characterized by path dependency (David 1985; Arthur 1989). Modern cases include, among others, the USSR and the states of the former socialist bloc, in general. Immediately after the collapse of the socialist bloc, these states tried to cure the collapse of their economies through shock therapy, meaning the sudden institutional change of a national economic policy from a state-controlled economy into a free-market economy. Some post-communist countries that used shock therapy (e.g., Poland, Czech Republic) did better than those that did not. But it is also true that the former socialist bloc countries that introduced the shock therapy method – in effect, a break of path dependence – suffered many painful consequences, such as income inequality, the great rise in unemployment, loss of gross domestic product (GDP), a dramatic fall of GDP per capita, civil unrest, excess mortality and decreasing life expectancy, along with poverty and/or shortages in products (Milanovic 2015). All these painful negative side effects were the price for the need for institutional change from regimes that were formerly authoritarian, heavily centralized and subject to state ownership against a free-market economy, protection of private property and parliamentary democracy. 2.3. The Reforms of Cleisthenes and the Establishment of the Political Institutions of Athenian Democracy It is not the purpose of this book to highlight the causes that led to the rise of democracy in Classical Athens and in Ancient Greece in general. Ober (1999) argues that when the citizens of Athens suddenly took power into their own hands, they changed the cultural and social landscape of their polis. Democracy led to fundamental adjustments in the basic structures of Athenian society, altered the forms and direction of political thinking and sparked a series of dramatic reorientations in international relations.13 From 510 BCE until his death (probably in 507), the lawgiver Cleisthenes reorganized the Athenian state institutionally by establishing democracy. He maintained Solon’s division of the Athenian citizens into four social classes according to their income potential rather than on the basis of their origin (e.g., being an aristocrat or a layman). These four classes included:

• The pentacosiomedimnoi, the highest income class, which included people who could earn at least 500 medimnoi14 annually from their own estate. They were eligible for all top positions of government of the times, which included the nine archons, the Areiopagos, the Council of the Four Hundred and the Assembly of citizens (Ecclesia).15 • The triacosiomedimnoi or hippeis, the second income class in the hierarchy, was comprised of those who earned 300–500 medimnoi. The title was related

The Ancient Economy  29 to the ability to provide a horse and be a cavalryman in times of war (Thorley 1996, 12). Hippeis could become also archons. • The diacosiomedimnoi or zeugitai, the third income class in the hierarchy, was comprised of those who earned 200 medimnoi. They were eligible for Ecclesia, the Council of the Four Hundred and lower state offices, while from 457/6 BCE onward, they could also become archons. Zeugitai served as hoplites (citizensoldiers) in the hoplite phalanxes which was the heavy infantry citizen militia army (Pritchard 2013). Phalanx formations were developed during the Archaic period.16 • The thetes, was the lowest social and income class of citizens who made less than 200 medimnoi annually. Wanting to “disconnect” the citizens from the four traditional Athenian tribes which were controlled by the old traditional aristocratic families, Cleisthenes subordinated the citizens to ten new “artificial” tribes, administratively consisting of 139 demes (municipalities) throughout the region of Attica, to which a citizen belonged depending on the geographical designation of his home. Each tribe included administrative areas from i) inland areas, known as the mesogeia; ii) the urbanized area, known as the asty and iii) the coastal areas of ​​Attica, known as the paralia (Hansen 1991, 184; McHugh 2019). The new system was complex, but it fully succeeded in making the Athenian political system more cooperative.17 Every citizen over the age of 18 was obliged to register himself in a local census office in the deme where he resided in order to be considered as a legitimate citizen of Athens. The deme compiled and kept a relative archive which testified that a citizen was registered as a legitimate citizen in the deme he resided in, known as lexiarchikon grammateion. A general revision of the local citizen registers (the lexiarchika grammateia), known as diapsephismos, could be conducted in all the 139 demes, whereby intruders could be expelled and struck off the list, sometimes after a trial before the Heliaia court. The appropriation of citizenship was being prosecuted with a regulation known as graphe xenias. The guilty were punished by deprivation of their freedom, and the Athenian government could sell them as slaves. At this point, before proceeding into any detail in the analysis of the economic organization and policies of Classical Athens, it is important to provide a brief overview of the Athenian political system and institutions. The Ecclesia of Demos was an institution related to the popular assembly of citizens. It was dramatically upgraded by Cleisthenes to become the protagonist of political developments. Thucydides, in the Funeral Oration of Pericles (2.37.1), characteristically writes that: Our constitution does not copy the laws of neighboring states; we are rather a pattern to others than imitators ourselves. Its administration favors the many instead of the few; this is why it is called a democracy. If we look to the laws, they afford equal justice to all in their private differences; if to social standing, advancement in public life falls to reputation for capacity, class considerations not being allowed to interfere with merit; nor again does poverty bar

30  The Ancient Economy the way, if a man is able to serve the state, he is not hindered by the obscurity of his condition. Athenian democracy had introduced a political system in which universal and active participation in decision-making was open to all (male) citizens who had legitimate voting rights without restrictions. The main decisions regarding state policy were made in the Ecclesia of Demos (Lyttkens and Gerding 2018). This was ensured by isonomia, the principle of equality before the law. Polybius (6.4.1–5) describes six forms of government, including democracy. Aristotle (Pol., 2.1261b, 3.1279a, 3.1287a, 4.1295b) describes democracy as a “brotherhood of equals” that alternates in governing. In the Athenian Constitution, he writes that: For the people has made itself master of everything, and administers everything by decrees and by jury courts in which the people is the ruling power, for even the cases tried by the Council have come to the people. (Ath. Const., 41.2) There is no doubt that this form of government is what Abraham Lincoln, in his Gettysburg Address on November 19, 1863, described as: “government of the people, by the people, for the people.” Assembly meetings began in the morning after an animal sacrifice to the gods and ending late at noon, although in some cases, in the event of the particular importance and complexity of the issues discussed, the process was extended until nightfall. The work of the Assembly began with the famous dictum: Tis agoreuein bouletai? (Who wishes to speak?). Except being a decision-making body, the Athenian Assembly functioned also as the legislative body of the state, as assembly decisions were also related to accepting or rejecting any new proposed law. The topics for discussion in the Assembly were prepared by the Council of the Five Hundred, also known as the Boule, whose members were elected by lot. Aristotle (Rhetoric, 1.4.7–1.4.8) put forth the issues for which a citizen could speak in the Assembly: i) state revenues, ii) war and peace/foreign policy, iii) defense, iv) imports and exports and v) legislation. In a wider sense, this list is not as restrictive as it may appear at first glance, as, in practice, every one of the five categories is connected to many other subcategories of importance. For example, state revenues can be linked to a large array of issues: economics, politics, religion, currency, sports and other social values. However, the right to full inclusion of male citizens in all public offices was granted to the lower income class, the thetes, only between 460–450 BCE, after the reforms of Ephialtes and Pericles, the leaders of the “democratic” faction in Athens. Thus, the ideal of active participation by all citizens of a society in political life and public offices without any restrictions occurred at that time – and for the first time in recorded history. After Cleisthenes’s reforms, and throughout the Classical period, the Athenians rallied around two factions: the democratic and the aristocratic. The democratic faction was comprised mainly of the people who had emerged through the

The Ancient Economy  31 development of trade and handicrafts. The aristocratic faction was in line with the nobles and the landowners of large estates.18 The exact number of Assembly gatherings within any given year cannot be determined with certainty. It is estimated that in the middle of the fourth century BCE, the meetings of the Assembly took place slightly more than 40 times a year with a minimum number of 10 mandatory meetings. The Assembly met four times during each prytany (a tenth of the conciliar year), which lasted from 36 to 39 days (Τhorley 1996, 30). One can reach such a deduction if he/she considers two further issues: i) Aristotle (Ath. Const., 43.4) states that the Assembly in Athens met four times every prytany and ii) Harris (1991) argued that usually there were also some extra popular assemblies within each year, known as the synkletoi or ecclesiai synkletoi. By contrast, Hansen (2007) argued that an ecclesia synkletos was one of the four meetings in each prytany. In order for the Assembly to take place, it was necessary for at least 6,000 men to be counted as participants. This means that if this requirement was not satisfied, the Assembly could not take place. Such a possibility always existed, as citizens participated in each Assembly only on a voluntary basis. The meetings took place on Pnyx Hill, less than a kilometer away from the Acropolis. The Pnyx could accommodate between 8,000 to 13,000 spectators (Hansen 1991; Cartledge 2016, 69). Citizenship was acquired upon reaching the age of 20 and only after the candidate had first served his two-year military service, known as ephebeia, in the eighteenth and nineteenth years of his life. What is also important to bear in mind is that, at the end of their thirtieth year, citizens had the opportunity to claim public office, that is, tο be elected to a state post (Manville and Ober 2003, 11; Tridimas 2012, 2). Unlike today’s democracies, the Athenians did not grant the right to be elected to a public post before 30 years of age, that is, before gaining ten years of experience in the Assembly and in public life. They believed that gaining experience was an important prerequisite before granting the opportunity for a citizen to hold public office. The logic behind this was that, in their face-to-face society, in which social networks were crucial, those holding public office would have acquired enough experience to respond satisfactorily to their duties. This is accepted by the Organizational Theory today. Organizations hire their staff on the basis of work experience because they expect greater efficiency from experienced workers. The Athenians would have thought in some similar way to effectively man the public services of their state with competent magistrates. Loss of political rights could only occur in the event that a citizen was sentenced by court decision on a serious criminal offense such as high-treason, corrupting or sexual harassment of the youth, corruption in managing public money, etc. Thus, at the age of 30, all law-abiding Athenians met the four key criteria that comprised their democratic ethos and form of governance:

• Isegoria: The right to speak freely in the Assembly and everywhere else. • Isokrateia: All state posts were open to any citizen who wanted to participate in government.

32  The Ancient Economy

• Isonomia: Equality of political rights for all Athenian citizens. It also meant equality before the law.19

• Parrhesia: To speak the truth at any personal cost. This principle characterized any citizen who stepped forward in the Assembly, the courts, etc. to defend the public interest in favor of the common good, even at their own personal risk.20

The above principles, for which the reader can further consult Cartledge (2022) as well as Economou and Kyriazis (2019) and Kyriazis and Economou (2021), are manifested by Herodotus (3.80), Thucydides (2.37, 3.72, 4.78) and Isocrates (Areopagiticus, 21–23, 27). Hayek (1960), in his book The Constitution of Liberty, argued that a proper understanding of isonomia, as used by the Greeks, is: “the equal application of the laws to all.” These values mean that an Athenian citizen’s rights were based on the following principles: majority rule, equality, meritocracy and non-exclusion from the city-state’s administration. According to the seminal works of Schumpeter ([1942], 2013, Ch. 21) and Downs (1957, Ch. 2), under a modern political economy interpretation, such principles still comprise the basis for the efficient functioning of democratic governance through the institutions of a free market economy. Under direct democracy, the acquisition of citizenship, regardless of income, was the highest honor for every young Athenian. On the other hand, deprivation of civil rights – for example, for high treason – was a severe punishment that led to social disrepute. According to Aristotle (Pol., 1277a., 20–30), in a democratic context, the Athenians could tolerate diversity in behavior and attitudes as long as this did not contravene the existing laws and morals of the society. Regarding the Council of the Five Hundred, it had legislative, auditing and administrative duties. Regarding the first, it was responsible for the preparation of proposals, known as probouleumata (bills, laws or decrees), put forth for approval, rejection or modification by the Assembly (Pritchard 2015, 32).21 What is also important is that it was possible for ordinary citizens to suggest issues for discussion by the Assembly. In order to do so, they first had to turn to the Council where they could submit a proposal for evaluation. Then, if the proposal met the legal requirements, it was forwarded for discussion and decision in the Assembly. Alternatively, it could be modified by the Council in an appropriate manner before being forwarded for discussion and decision in the Assembly (Lyttkens 1994, 2013, 59; Τhorley 1996, 28; Schwartzberg 2004, 312; Pritchard 2015, 32–34). Regarding the second, through the Council’s staff members, it was responsible for supervising the state’s treasurers and all financial magistrates22 (Rhodes 1972, 104–105; Pritchard 2015). Rhodes (1972, 89) characterizes the Council as generally responsible for the financial well-being of Athens. Third, the Council also had administrative duties: the governance of the polis through the prytaneis. In particular, due to the Cleisthenes’s reforms, each of the ten phylae (tribes) participated in the workings of the Council with 50 members who were elected by lot for a term of one year.23 Rotationally, each tribe with its 50 councilmen governed the Athenian state for a period corresponding to an Attic month (36–37 days). This administrative period was called the prytany, and the 50

The Ancient Economy  33 councilmen were called prytaneis (McAuley 2013, 183). In practical terms, the ruling prytaneis ruled the polis with full executive rights for 36–37 days. The term of office was equal to one-tenth of the political year (Carugati et al. 2019). The prytaneis were also responsible for receiving foreign diplomatic missions (Τhorley 1996, 25–29; Ober 2008, 142–143; Τridimas 2012, 4; Lyttkens 2013, 59, 76). Each morning, a “chairman” of the prytaneis, known as the epistates, was elected by the other prytaneis, from one sunset to the next day (Arist., Ath. Const., 43.3; Schwartzberg 2004, 312). If an Assembly was held that day, the epistates presided over it (Thorley 1996, 25–28). The prytaneis were settled in a specially designed circular building with an outer diameter of about 18.3 m and its entrance on the east side called the Prytaneion or Tholos (dome), located right next to the Bouleuterion, the building where the daily meetings of the councilmen took place and where the proboulemata to be submitted to the Assembly were prepared. During their tenure, the prytaneis spent the night in the Tholos. They also had lunch there. The Tholos was built around 470 BCE, and the keys to the temples, the seal of the state and the hearth of the polis were kept there. Therefore, the importance of this building is obvious.24 In principle, the position of councilman was one of absolute responsibility toward the state, requiring many hours to carry out one’s duties properly. In order to become a councilman or a public magistrate, all candidates had to pass an evaluation procedure known as the dokimasia, a vetting process with a specific set of criteria, the evaluation of which was done by the Council (Rhodes 1972, 176–178). The criteria for acceptance were: i) being Athenian through both parents; ii) being acknowledged as a trustworthy person; iii) not holding any pending financial obligations to the state; iv) being pious; v) having taken part in war campaigns, thus, having fulfilled his military obligation and, finally, vi) his behavior towards his parents having been appropriate. If the fulfillment of these criteria was universally acknowledged and no objections were raised, then the candidate could assume his post (Thorley 1996, 27). Essentially, this body examined the overall reputation and conduct of life of the candidate before becoming a public servant rather than his competence (Ober 2008, 156–157). If a candidate was not approved by the Council, this was called apodokimasia (Hansen 1991, 219, 349). In that case, the candidate could appeal to the Heliaia popular court in the hope that the court would reconsider his candidacy and request that the Council accept the candidate after all (Arist., Ath. Const., 45.3, 55.2; Demosthenes, To Leptines, 90; ΜcAuley 2013, 185). Every civil servant or councilman was subject to probation. When his term of office was coming to an end or if at any moment during his term of office, there were suspicions of misuse of public funds, a councilmen or civil servant could be asked to go through a special committee of the Heliaia to give account (Schwartzberg 2004, 312; Tridimas 2012, 4–5). If during the tenure of a councilman or a civil servant his actions raised suspicions of any irregularities or corruption, the next procedural step could again involve prosecutors from the Heliaia court (Arist., Ath. Const., 54.3–5; Hansen 1991, 222–223; Pritchard 2014, 8; Bitros

34  The Ancient Economy et al. 2020, 45–48). If the Heliaia found that a public official was not fulfilling his obligations properly or was found to have been bribed, consequences could be severe: termination of his tenure to the state post, stigmatization, deprivation of civil rights, payment of heavy fines and, in some cases, facing even death. There were specific committees of state officials charged with auditing public officials in order to ensure efficient administration and the proper use of public assets.25 Cases of absence of councilmen from their duties have also been recorded. Prolonged absences drew widespread public approbation. As for the Areiopagos court, after 462 BCE, and the reforms of Pericles and Ephialtes, most of its responsibilities were transferred to the Assembly, the Council and, mostly, to the Heliaia court. The Areiopagos was limited to a court that dealt only with homicides (Hansen 1991, 288).26 Regarding the institution of the nine archons, this was also a remnant of the aristocratic era, which, however, was respected and honored by Athenians as part of the city-state’s tradition. After 462, this office was stripped of its previous responsibilities but continued to be considered a prestigious post during the period of democracy. The nine archons included the eponymous archon, the archon basileus, the polemarchos and the six thesmothetai. They were given the task of presiding over various court hearings on certain cases, conducting preliminary investigations of those involved and drawing lots for the judges. The introduction of selection of the nine archons by lot in 487/486 had altered the range and probably the caliber of new members (Thorley 1996, 51). After the end of their term, they all became lifelong members of the Areiopagos. The six thesmothetai had the duty to review the laws annually; to determine whether there were inconsistencies, duplications, or invalid laws in force and, if so, to inform the nomothetai group of judges to rectify the situation. The latter were appointed regularly to consider proposed changes in the laws, on which they, not the Assembly, took the final decisions. In some cases, they were drawn by lot from the list of 6,000 heliastic jurors; thus, they were ordinary citizens, without special expertise.27 The selection process of the nine archons was as follows: from each of the 10 Athenian tribes, ten candidates were nominated, and, through a lottery process, one of them was selected. As each tribe was attributed one archon, the tenth man was appointed the secretary of the thesmothetai. Regarding the Heliaia (instituted by Solon), Cleisthenes significantly strengthened its judicial powers. This body was manned by elected ordinary citizens through the process of drawing lots from each tribe. Aristotle (Ath. Const., 24.3) mentions that these courts already existed at the time of the Persian Wars. Any Athenian citizen over the age of 30 could become a member. The Athenians understood that the outcome of a court decision could significantly affect the future social course of an Athenian citizen, so every citizen was entitled to be judged fairly. The designers of the Athenian judicial institutions believed that a fair trial was linked to experience. The fact that it took ten years after becoming a citizen to take up the duties of a judge means that the state considered time as a prerequisite in gaining relevant experience regarding the functioning of state institutions (Avil΄es and Mirhady 2013, 213).

The Ancient Economy  35 Harris (2013) provides tangible evidence which proves that the Athenian state functioned under the principles of the rule of law. The Heliaia court met three basic principles found in contemporary law:

• All citizens were accountable to the law, and every citizen could claim his/her rights in the courts (Aristotle Ath. Const., 11).

• No one is deemed guilty (e.g., of murder) unless previously convicted by court decision (Dem., Against Aristocrates, 29).

• Laws must be formulated in simple and understandable terms so that no misinterpretations appear (Dem., Ag. Tim., 68).

The Heliaia consisted of 6,000 judges known as heliastai (judges of the Heliaia) (Andoc., M., 17; Aristophanes, Wasps, 662–663). They came from the ten tribes of Athens, each tribe contributing 600 judges. Before taking office, through a special ceremony, they recited the so-called Heliastic oath, by which they affirmed that they would perform their duties conscientiously. The draw for their selection was made every year by the nine archons. To assume their duties, these popular judges should not have been previously deprived of their civil rights on a charge of atimia (dishonesty) nor should they be debtors to the public. Heliaia’s body was divided into ten sections, each with 500 full and 100 alternate members (Hansen 1991; Lyttkens 1994, 64; Thorley 1996, 53–54). Their large number ensured the independence of the judiciary. Newly appointed judges were obliged to swear that, during their term of office, they would exercise their duties according to the laws (Ober 2008, 180). The heliastic courts, for about 200 days a year, tried cases of a civil, criminal and political character, i.e., prosecuting generals for crimes, attempts to overthrow the regime, cases of high treason and corruption, etc. (Tridimas 2012). Various buildings functioned as courtrooms. Objective administration of justice played an important role in the smooth process of social life. For the selection of the judges who would be assigned each case, a lot was drawn through the use of a device that functioned as an allotment machine, known as the kleroterion (Arist., Ath. Const., 64–66).28 Regarding the ten strategoi (ten generals) this post emerged from the reforms of Cleisthenes. It was probably introduced in 501 BCE. The generals, parallel to the command of the land army, were also assigned the command of the fleet. Each tribe proposed a general, regardless of the income class to which he belonged, but the final decision was made by the Assembly. Their selection was not made by lot, like most other public offices, but was decided by the Assembly so as to appoint the most appropriate candidates for this crucial post (Bitros and Karayiannis 2013, 5). What is also important to be taken into account is that from 440, at least one general was chosen from all tribes. This created the conditions for the optimal choice between different candidates for this position. Anyone could become a general once reaching the age of 29 (Tridimas 2012, 2; Lyttkens 2013, 52). Generals were also assigned additional duties, such as foreign policy duties and inspecting the effective implementation of the trierarchy (see Sections 3.3 and 3.4). Their term of office was annual. Initially, re-election was

36  The Ancient Economy not allowed for an adjacent term, but this changed in the first quarter of the fifth century BCE, as this post required not only experience and specialized technical knowledge on warfare but also political and diplomatic skills. Pericles was elected as a general for about 15 consecutive years. The pivotal influence of capable generals such as Themistocles, Pericles and Cimon in Athenian politics does not imply that they could be seen as “rulers” of the Athenian state. Other generals well-known as political figures of that time included Nicias, Alcibiades, Cleophon, Thrasybulus and Conon in the fifth century, and Timotheus, Iphicrates and Phocion in the fourth. Finally, the demarchs (mayors) were an institution founded by Cleisthenes. At first, they were elected to a one-year term, probably being chosen in a local municipal assembly, but around 451/450 BCE, they were elected through drawing lots (Thorley 1996, 43, 45–46). Demarchs each, together with his staff, had the following duties:

• Managing the demes’ revenues and expenses in cooperation with the treasurer of the demos.

• Maintaining a reliable record of all citizens. This was important because the registration in the deme catalogues was directly related to citizenship.29

• Maintaining a reliable cadaster of the rural land properties that belonged to the deme.

• Preparing and organizing a series of festive (and non-festive) events, such as • • • • • • • • •

offering sacrifices to the gods, in collaboration with the priests of the temples. Attending to and supervising the preparation of theatrical plays. Collecting rents from municipal lands. Collecting state taxes (upon request). Contributing to the state regarding the recruitment of citizens by holding enlistment records of citizens in case of war. Collecting extraordinary state taxes when necessary. Contributing to the process of selecting the deme’s members of the Council. If there were too many candidates, the deme would probably have had to go through a lottery process. Supervising the creation of honorary inscriptions with the names of those who benefited the deme. Representing the deme in the courts when needed. Being the link between his own deme and the others.

Figure 2.2 contains a brief schematic representation of the state institutions of the Athenian state as an integrated whole. A key feature of the Athenian political institutions was that the system encouraged its citizens to actively participate in public life (Manville and Ober 2003; Ober 2008). In practice, a man could only serve twice in his lifetime on the Council but not in successive years and once in other magistrate offices (Hansen 1991, 249; Tridimas 2012, 4). Therefore, there was a fair distribution of public offices accessible to any citizen regardless of income or origin (layman or a wealthy man/noble) if he really wished to participate in public life.

The Ancient Economy  37

Popular Assembly (Ecclesia) Council of the Five Hundred

Popular sovereignty -Active participation in decisionmaking

Prytaneis

Heliaia and Areiopagos courts

Ten Strategoi (Generals)

Public administration posts

Nine Archons 10 tribes and 139 demes

Figure 2.2 The institutions of cooperation and interaction of the Athenian city-state

2.4. Financing the Political Institutions of the Athenian Democracy This section discusses the nexus between the political institutions of the Athenian democracy and their finances. Regarding the Athenian popular Assembly, during the Peloponnesian War, there was a tendency for the citizens to abstain from the Assembly gatherings, with the risk that the required minimum limit for a quorum of 6,000 participants would not be met. To face this, after the restoration of democracy in 403 BCE, after its shortlived overthrow by the Thirty Tyrants oligarchic regime, the Athenians introduced a monetary measure known as the ecclesiastikon, amounting to 3 obols (half a drachma),30 as compensation for the loss of income from their daily work. This functioned as an extra motive for citizens to participate in the Assembly (Andreades 1933, 253). By the time of Aristotle (384–322 BCE), participants were receiving 1 drachma, equivalent to two-thirds of a daily wage for the average worker during the fourth century BCE (Loomis 1998). And when one of the more important assemblies took place (Ecclesia Kyria), the compensation for participants amounted to 1.5 drachmae, equivalent to the full average daily wage (Arist., Ath. Const., 62;

38  The Ancient Economy Hansen 1991, 150). With the introduction of the ecclesiastikon payment, participation in the Assembly increased dramatically. Regarding the Council, unlike current practice, laws or decrees were approved and ratified directly by the Assembly. Initially, being a bouleutes (councilman) did not imply a salary; when compensation was introduced in the fourth century BCE, it was set at 5 obols, i.e., an amount equal to five-sixth of a drachma. Regarding the Heliaia court, Aristotle (Ath. Const., 27; Pol., 2.1274a5–9) mentions that Pericles was the first to grant salaries to the judges of the Heliaia – 2 obols. Under Cleon, however, the daily payment of the judges was raised to 3 obols around 425 and remained at that level during the whole of the fourth century (Tridimas 2012, 4; Avil΄es and Mirhady 2013, 213; McAuley 2013, 183). The payment was introduced because it could have been very difficult for those who worked for a living and those who lived on farms to suffer the loss of daily incomes by participating in the courts (Andreades 1933, 253, 256). Hansen (1991, 189) has estimated the total running cost of the courts at between 22 to 37T (talents) per year. The logic behind offering payments to the public magistrates was to provide the opportunity for the poor to participate in the public life, as mass participation lay at the very core of the Athenian democratic regime (Kallet 2007, 77). Kallet-Marx (1993), Pritchard (2015, 28, 119) and Economou and Kyriazis (2022) reached a very important deduction regarding the role of the Athenian Assembly: that in Classical Athens, the demos had full control over public spending. Through participating in the Assembly, citizens became well informed of the financial implications of their votes. Assembly members had quite a good knowledge of what was normally spent on major public activities. The Council monitored the revenues and the expenses of the polis closely and could advise the Assembly in case extra funds had to be raised in addition to what had previously been voted. Furthermore, crucial to establishing an efficient and transparent system of public finance is the finding of Kallet-Marx (1993) and Ober (2015b) that any politician, i.e., Themistocles, in supporting a proposal, had to cost it accurately and to explain how this cost related to the polis’s fiscal position could be covered, If a rival politician hoped to convince the assemblymen in favor of a counterproposal, he had to explain convincingly from where new income or cash reserves could be sourced to pay for this counterproposal. Pritchard (2015, 28, 33) adds that, in voting for such a proposal, the members of the Assembly had to decide not only on its merit but also on the proportion of public income that should be devoted to it. To my point of view, this requirement is one of the most important prerequisites regarding Athenian democratic decision-making about economic matters, as it has an intertemporal characteristic; today, for example, opportunistic politicians in the global arena easily make populist proposals, offering abstract promises and using glib slogans, such as “if you vote for me, I will bring prosperity to society,” or “our political program guarantees economic development to the people,” etc. But, in most cases, these proposals are never adequately costed nor is any explanation offered as to how to achieve the “guaranteed development” or “prosperity” etc. By contrast, in Athens, orators who clashed in the Assembly, whether representing the democratic or the oligarchic faction or simply themselves, had to

The Ancient Economy  39 provide fully costed proposals because they, otherwise, risked severe punishment if their proposal misled the demos into taking wrong decisions (e.g., financing war or a public work) or introducing an inefficient law (Kallet-Marx 1993; Samons 2000). In such a case, the initiator of a law or a decree in the Assembly, that is, ho boulomenos (he who wishes to propose) could face a heavy fine, as high as 1,000 drachmae, a sum analogous to wages of more than two years. This could happen through graphe paranomon. This institution was introduced in 415 ΒCE. According to it, any citizen could sue the proposer of a psephisma (decree) by declaring that the proposal to the Assembly was against the existing laws or could harm the state. Of course, the accuser had also the obligation to explain, how, according to him, the state could suffer potential damage by the proposed decree. Furthermore, any citizen could also raise a graphe paranomon if a proposed decree to be voted on by the Assembly did not follow (according to him) the proper submission process. In principle, the accuser had the right to propose a graphe against a boulomenos within a year after the proposal was officially made in the Assembly (Hansen 1991, 205–212; Fröhlich 2013, 255; Canevaro 2018; Lyttkens et al. 2018).31 In his speech (Ag. Lac., 35.39), Demosthenes mentions that no one had the right to appeal against a written law or decree. In any case, what is for sure is that, as is the case today, both honest politicians and opportunists coexisted in the Athenian political arena. To protect themselves from the latter, the Athenians introduced institutions such as the graphe paranomon. According to it, if a person had been condemned three times for coming up with an unconstitutional proposal, he would be sentenced (among other penalties) as atimos (dishonored) and be deprived of all political rights, the right to legal protection and the right to enter the marketplace and the sanctuaries (Lyttkens et al. 2018). These were very severe and humiliating penalties. But, to my point of view, the reason for their severity was to protect the Athenian “constitution” and the rule of law from any dangerous situations that could arise from institutional proposals by people with selfish motives. As concerns the running cost of the Council, Hansen (1991, 254–255) writes that in a normal year of 354 days, the 50 prytaneis were paid 1 drachma per day and that some 300 other councilors turned up for the meetings on some 275 days. Thus, Hansen estimated the cost of the Council at about 15 talents32 per year. Regarding the courts, the Athenians accepted to be burdened with public expenditures to secure the financing of an efficiently functioning judicial system. Lyttkens (2013, 126), among others, writes that Athenian judicial decisions were provided rapidly. As far as is known, trials never lasted more than a day, and many private cases lasted considerably less than this. Lyttkens reproduces Xenophon (W.M., 3.1–3), who explicitly advocates the quick settlement of commercial disputes as a way of prosperity to the polis. Xenophon writes: If prizes were offered to the magistrates for the just and prompt settlement of disputes, so that sailings were not delayed, the effect would be that a far larger number of merchants would trade with us…It would also be an excellent idea to reserve seats in the theatre for merchants…the rise in the number

40  The Ancient Economy of residents and visitors would of course lead to a corresponding expansion of our imports and exports, of sales, rents, and customs. (Reproduced by Lyttkens (2013, 126)). The Athenian democrats, therefore, understood the importance of providing speedy litigation. This is also considered important in modern civil and criminal proceedings as a key element for transactional cost reductions as defined by Coase (1937, 1960). In the event a plaintiff did not get one-fifth of the judges’ votes, he was punished with a fine of 1,000 drachmae and was declared atimos (Lyttkens et al. 2018). This measure was important, as it functioned as a disincentive to resort to the courts too often. A plaintiff was discouraged from going to court when there was no clear and conclusive evidence to support his accusations against the accused, and the penalty of 1,000 drachmae was prohibitive and acted as a disincentive to the abuse of judicial services; it also served to restrict the possibility of an innocent being convicted by mistake. Finally, regarding the ten strategoi, their duties were not limited to the command of the military forces but were also related to administrative issues also connected to public finances. From the middle of the fourth century, and during a peaceful period, the generals were given specific assignments, such as the strategos epi tin choran who was responsible for the defense of Attica; the strategos epi tous hoplites who was in charge of expeditions abroad; the two strategoi epi ton Peiraia were responsible for the harbor of Piraeus and the strategos epi tas symmorias (on the symmories)33 was responsible for the warships’ equipment. The other five generals were entrusted with various duties, such as ensuring an effective conscription system and the effective mobilization of citizens and metics to bear arms as a citizen militia, etc. They gathered in a specific place located in the famous agora of Athens, known as the Strategeion. Pritchard (2012, 48–49, 2014, 8) argues that the generals were often required to find financial resources on their own to meet the tasks and obligations of their service. As a final comment, Table 2.5 clarifies, in brief, the essential role of the Athenian political institutions and their nexus with public administration. In an excellent Table 2.5 The nexus between the main Athenian state institutions State Institutions Their State Functions Assembly Council Prytany Heliaia Areiopagos Nine Archons Ten Generals

Mainly legislative but also government and auditing duties Legislative (preparation of laws and decrees), important auditing duties (see Section 8.7) and administrative duties (through the prytaneis) Each prytany had government administration duties Judicial and auditing duties (see Section 8.7) Judicial and auditing duties (see Section 8.7) Judicial and auditing duties regarding the supervision of the correct application of laws and decrees Government administration duties regarding the public good defense. Some of the generals also had auditing duties (strategos on trierarchy)

The Ancient Economy  41 paper, Fröhlich (2013) analyzes the political institutions of the Greek polis to explain how the polis system of organization achieved checks and balances regarding the functioning of its institutions. This was achieved through separation of powers (legislative, executive, judicial) between a multitude of governmental bodies (the Assembly, the Council, the prytaneis, the courts, etc.) and a variety of institutions such as graphe paranomon and the nomothetai, eisangelia and dokimasia. Aristotle, in his Politics, Plato, in his Republic, and Polybius, in his Histories, introduced the idea of a “mixed government,” after studying many of the constitutional forms in the city-states of Ancient Greece. But it was John Locke ([1689], 2016), in his Second Treatise of Government, and Baron de Montesquieu ([1748], 1989), in his political theory treatise The Spirit of the Laws, who explicitly pioneered the notion of the separation of powers in the modern world and explained its importance for the smooth functioning of state institutions under the rule of law. Due to space limitations, I cannot provide further analysis on this issue, but regarding the functioning of the Athenian institutions of governance, readers can further consult, among others, Rhodes (1972), Thorley (1996), Ober (2008), Pritchard (2015), Cartledge (2016) and Bitros et al. (2020). Notes 1 For a discussion of Bücher's controversy with Meyer, see contemporary interpretations by Reibig (2001), Derks (2002), Amemiya (2007, 57–61), Bresson (2007, 2014, 2016, 15–25) and Tridimas (2019). Most of the texts on the confrontation between the two authors were republished by Finley (1979). For the original texts regarding the controversy, see Bücher (1893), Meyer (1895, 1910) and Βeloch (1884, 1885, 1886). 2 Karl Marx ([1844], 1992), in his Capital: A Critique of Political Economy, expressed similar views in Chapter 1. 3 Historical materialism is a term used to describe Karl Marx's ideas on history. Marx connected historical change to the rise of class societies and the way humans labor together to make their living. For Karl Marx and Friedrich Engels, economic development in a society is related to social and political upheavals characterized by changes to the mode of production. Historical materialism challenged the view that capitalism is the end of history. 4 For other relative works, see also Finley (1952, 1953, 1970, 1979, 1982, 1983, 1984, 1985). For a review of Finley's work, see, among others, Morris (1994), Bresson (2007, 2016) and Tridimas (2019), and for a critique of his work, see authors such as Derks (2002), Engen (2010) and O’ Halloran (2018). 5 These issues are further analyzed in detail in Chapter 7. 6 I revert on this issue in Section 5.10. 7 Economic historians or political economists who have focused on ancient Greek economy include, among others, the Nobelist Douglas C. North, and (in alphabetical order) Takeshi Amemiya, Christos P. Baloglou, George C. Bitros, Manfred G. Holler, Nicholas C. Kyriazis, Carl Hampus Lyttkens, Bertram Schefold, George Tridimas and the late Andreas M. Andreades and Anastasios Karayannis. 8 We have already implemented the bounded rationality concept regarding Classical Greece in Kyriazis and Economou (2015a) and Economou and Kyriazis (2019, 2022). 9 Some eminent figures of the Old Institutional School of Economics were Walton H. Hamilton, John R. Commons, John Dewey and Thorstein Veblen. Eminent figures of the NIE are, among others, the Nobel Prize laureates, Ronald Coase, Douglas C. North, Oliver Williamson and Elinor Ostrom. Other scholars whose important contributions focus on institutions were/are, among many others, Armen Alchian, Harold Demsetz,

42  The Ancient Economy Geoffrey Hodgson, Avner Greif, Masahiko Aoki, Yoram Barzel, Daron Acemoglu, James Robinson. Etc. 10 The socio-economic and political outcomes that took place during that period have wielded a long-lasting influence, in particular on Western societies’ attitudes. After all, it is very well known that the Renaissance period of Europe was mainly related to the rediscovery of Classical Greek philosophy. 11 Further democratic reforms were postponed temporarily during the tyrannical regime of Peisistratus and his sons (they ruled in the years 561, 559–556, 545–528, 528/527–510 BCE). 12 Perhaps one of the most well-known historical phrases that depicted the authoritarian nature of the Ancien Régime toward the people is the notorious quote – L’État, c’est moi (the state, it is I: I myself am the nation) –was uttered by King Louis XIV, the so-called “Sun King” who ruled between 1643 until his death in 1715. 13 For an analytical description of the rise of democracy in Classical Athens, the reader can consult previous publications such as Kyriazis and Economou (2015) and Economou and Kyriazis (2017, 2019) and the references provided therein, as well as Ober et al. (2007), Ober (2008) and Cartledge (2016), among others. 14 A medimnos (plural medimnoi) was a unit of volume, which was generally used to measure dry food grain. In Attica, it was approximately equal to 59 liters, although this was frequently subject to regional variation. Thorley (1996, 11) writes that a man typically consumed about eight medimnoi of wheat per year, and a man, wife and three children about 25 medimnoi. 15 The Council of the Four Hundred was introduced by Solon. It was replaced by the Council of the Five Hundred during the Cleisthenes’s reforms. It became the second key state institution in democratic Athens. 16 These citizens were wealthier than the thetes, allowing them to buy the expensive hoplite equipment to be able to participate in the phalanx (Hanson 1995; Kyriazis 2012; Economou and Kyriazis 2019). 17 A deme (municipality) functioned, to some degree, as a polis in miniature, and, indeed, some demes, such as Eleusis and Acharnae, were in fact significant towns. Each deme had a demarch (mayor) who supervised its affairs. The city of Athens was the major urban center of the notable city-state in Attica, during the Classical period onward. 18 This, to some extent, reminds us of the case of England in early modern Europe in which the emerging mercantile class and the emerging mercantile towns were oriented toward international trade and the sea. This class supported the rise of the Parliament, while the traditional conservative class of the landowners of large estates, supported the English crown (Economou and Kyriazis 2019). This mercantile class, even backed up the Parliament during the Civil War in 1642, and supported the ­modernization of Parliament during the Great Reform Act of 1832 (Angelucci et al. 2022). 19 To this particular point, I do not accept Hansen (1991, 359), who argues that isonomia was not related at all to equality before the law. 20 A famous phrase which is attributed to classic political thinker, Edmund Burke, “The only thing necessary for the triumph of evil is for good men to do nothing,” is clearly related to the concept of parrhesia. 21 From this point on, for typological reasons and clarity, I will simply use the term “the Assembly” when referring to the “popular Assembly,” the “Athenian Assembly (of citizens)” or the “Ecclesia.” Similarly, I will simply use the term “the Council” for the “Boule,” or the “Council of the Five Hundred.” 22 I analyze, in detail, the issues of auditing mechanisms of the Athenian public administration and the management of public finances in Chapter 8. 23 The ten phylae were the following: Erechtheis, Aigeis, Pandionis, Leontis, Akamantis, Oineis, Kekropis, Hippothontis, Aiantis and Antiochis. 24 For the Tholos and the Bouleuterion buildings, see also Figure 5.2.

The Ancient Economy  43 25 I extensively analyze these committees regarding the auditing procedures of the Athenian state in Sections 8.6 and 8.7. See also Bitros et al. (2020) and the relative references that are provided therein. 26 During the Archaic period of aristocracy and oligarchy in pre-Classical Athens, the Areiopagos, the Supreme Court of the polis functioned as the seat of the aristocratic political council. Its role in public affairs was very active and it had, among others, the jurisdiction to punish those who questioned social peace with their improper behavior. 27 https://oxfordre​.com​/classics​/display​/10​.1093​/acrefore​/9780199381135​.001​.0001​/acrefore​-9780199381135​-e​-4449​;jsessionid​=519​5696​F400​F6EF​CA62​F501​3D8A72DF4 28 For the judicial system and practices in the Athenian courts, see MacDowell (1978), Lanni (2016), Avil’es and Mirhady (2013) and Harris (2013). 29 Therefore, like every institutionally developed state in history, the Athenian state maintained municipal records in order to know the exact number of its citizens and, through those records, probably also had a fairly accurate picture of the number of slaves and metics from other (mainly) Greek states living in Athens. Other foreigners could stay in the city only for a certain period and for a specific reason, e.g., trade, ambassadorial delegations, etc. 30 One obol was equal to one-sixth of a drachma. 31 Graphe paranomon was a very important institution which functioned as a mechanism of defending the state against demagogy, but its analysis exceeds the scope of the current book. One can especially read Canevaro (2018) and Lyttkens et al. (2018) about it. 32 The largest denomination of drachma. One talent (T) was equal to 6,000 drachmae. An Attic weight talent was about 25.8 kilograms. The Aeginetan talent weighed about 37 kg. 33 For the institution of symmories or symmoriai, see further in Section 3.4.

Ancient Greek authors (Perseus Digital Library) Andocides, On the Mysteries Aristophanes, Wasps Aristophanes, Wealth Aristotle, Athenian Constitution Aristotle, Oeconomica Aristotle, Politics Aristotle, Rhetoric Demosthenes, Against Dionysodorus Demosthenes, Against Lacritus Demosthenes, Against Leptines Demosthenes, Against Zenothemes Demosthenes, For Phormio Herodotus, The Histories Lysias, Against Eratosthenes Plato, Laws Plato, Republic Polybius, Histories Thucydides, Histories (The Peloponnesian War) Xenophon, Oeconomicus Xenophon, Ways and Means

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3

Adopting a “Turn to the Sea” Strategy and the Transformation of the Athenian Economy

3.1 The Gradual Creation of a Maritime Infrastructure during the Archaic Period and the Trireme Warship In a very interesting book entitled Ships and Silver, Taxes and Tribute, Hans van Wees (2013) provides evidence on the key issue of the creation of the Athenian maritime infrastructure. He argues that Athens did not transform into a maritime economy after 483 BCE, almost from scratch, but, instead, as a result of a long, gradual process that began at least during the period of Solonian reforms. In accordance with Van Wees, Figueira (2011) argues that the structural changes were already taking place by the sixth century. The fact that the Athenians had gradually established a naval culture and infrastructure, at least from the time of Solon on, is also verified by the information provided by Aristotle, who describes the institution of naukrariai, introduced soon after Solon’s reforms. Naukrariai was a system of collecting taxes at the municipal level to fund warships and furnish cavalry to the Athenian state for its defense (Figueira 2011; van Wees 2013). Aristotle (Ath. Const., 8.3) wrote that the Solonian administrative system of the city-state was comprised of four Athenian tribes, each one comprised of three trittyes, and each trittys comprised of four naukrariai. Thus, in total, the Solonian administrative system was comprised of 48 naukrariai, each one responsible for the provision of one operational warship to the Athenian navy as well as two horsemen to the cavalry. Naukraroi were the local financial officers responsible for collecting the taxes. In effect, the naukrariai could be seen as the “progenitors” of the Athenian demes (municipalities) of the Classical period. This is verified by Aristotle (Ath. Const., 21.5). Regarding the status of ownership of these penteconter-type of warships, a group of wealthy citizens were responsible for the supply, maintenance and command of these warships and crews during the sixth century (Figueira 2011; Van Wees 2013). Gabrielsen (1994, 24–26) and Lyttkens and Gerding (2022) believe that the ships were under private control but could be called upon for the defense of the polis. Through its demes, the state was responsible for the maintenance of the warships which belonged to wealthy private individuals but were used in service to the state when in need. The naukraros (ship’s chief) was also the captain of his naukraria’s ship and was under the command of the polemarchos, one of the nine archons with military duties. Van Wees (2013, 46) believes that the naukrariai could be seen DOI:  10.4324/9781003434146-3

Adopting a “Turn to the Sea” Strategy  55 as the progenitors of the institution of symmoriai of the Classical period. Under the above views, O’ Halloran (2018, 183), based on Herodotus (3.39), argues that during much of the sixth century, ownership of warships belonged to aristocratic families or merchants who used them for both trade and privateering operations,1 and this was both beneficial to the state and profitable for these individuals. Figueira (2011) proves that the status of the relationship between the private and the public sector regarding the naukrariai was rather complex. From an institutional viewpoint, and under a modern interpretation, the naukrariai could be characterized as public–private partnerships for the provision of the public good of defense. This is in contrast to the status of ownership of the ships during the Themistocles’s naval program, as will be described in the next section, as under the vast shipbuilding program of 483/482 BCE, trireme warship construction was paid for by the Athenian treasury; thus, the ships belonged to the state. Finally, with Cleisthenes’s reforms, the duties of the naukraroi passed to the demarchs. This is because, according to Figueira (2022), the naukraric system had probably failed in the hostilities with the Aiginetans during the early 480s through lack of sufficient ships (and perhaps highquality crews); thus, it had to be replaced with a more efficient institution. The trireme warship was a complex technological achievement of its time but was widely used only during the Classical period. Thucydides (1.13.1–5) writes that the trireme-type of warship was invented in Corinth in the late eighth century, and Ameinocles, a Corinthian shipwright, made four ships for the Samians. The Phoenicians, during the seventh century BCE had further advanced the trireme. This type of warship was a significant technological breakthrough; it was far more expensive to build and to maintain and required a much higher cost per man. Thus, its widespread use only occurred from the end of the sixth century BCE on (O’ Halloran 2018). It was an elongated, fast, low ship with a shallow keel and, in general, a relatively light overall construction. Its length ranged from 33 to 43 meters, its width 3.5–4.4 meters and it displaced 50 tons (Image 3.1). The height was 2.1–2.5 meters above the water line and 0.9–1 meter at the draught. Its maximum cruising speed was about 8 knots when using oars and some 10 knots with the use of the sail with a strong wind. Movement relied on the efforts of 170 eretai (rowers), who were placed on three levels. The rowers were divided according to their positions in the ship: thranitai, zygitai and thalamitai. The 62 thranitai were placed in the top row (thranos means “deck”), the 54 zygitai in the middle row and the 54 thalamitai or thalamioi in the lowest row. In the bow, there was a protruding wooden ram covered with brass used to ram and disable enemy ships in battle. According to Morrison et al. (2000) – whose research specialized on the trireme – Acton (2014, 185–201), Lyttkens and Gerding (2022) and others, this type of warship comprised a 200-member crew (pleroma): seven officers, nine to ten general duty seamen, 14 marines called pezonautai and 170 rowers.2 The seven officers were:

• The trierarch – the commander of the ship. • The kybernetes – the person in charge of navigation. He operated the rudder. • The keleustes – the person responsible for training and overseeing the rowers.

56  Adopting a “Turn to the Sea” Strategy

Image 3.1  The Olympias, a replica of an ancient trireme (from the bow side). Source: https://commons​.wikimedia​.org​/wiki​/File​:Triere​_Olympias​_at​_Paleon​_Faliron​_Museum​.JPG.

• The prorates – essentially, he was the lookout, reporting to the trierarch and the kybernetes.

• The pentecontarchos – the name was a remnant from the time of the penteconter warships. On the triremes, he held the duties of secretary, treasurer and caretaker and functioned as the supply officer. • The naupegos – in effect, he was the onboard engineer responsible for maintenance. • The trieraules – he was responsible for maintaining the rhythm of the rowers.

Akrigg (2019, 65) argues that the marines should be in the 20–30 years of age group, while the trierarch could not exceed 50 years of age. When a trireme operated effectively during battle, it functioned like a well-tuned orchestra in which different instruments playing different sounds and harmonies, nevertheless, succeeded in performing a common melody. A trireme weighed 50 tons. According to O’ Halloran (2018, 8, 189, 193), this kind of warship represented an enormous leap in naval technology, incorporating significant technological innovations such as the ram and mortise-and-tenon shipbuilding techniques. Thus, the construction of large fleets of triremes required vast amounts of lumber (mainly, pine, fir and cedar). This led to the exhaustion of local supplies of lumber in Attica, thus forcing the Athenian authorities to seek and import large quantities from Macedonia, from areas such as Amphipolis (Amemiya

Adopting a “Turn to the Sea” Strategy  57 2007, 83) through forging alliances such as with Perdiccas of Macedon (IG i3 89). The Athenians also imported timber from lands around the Aegean Sea, Asia Minor and areas outside mainland Greece. This problem was faced by later maritime superpowers as well, such as Rome, the Byzantine Empire, Venice, Genoa, the United Provinces, Spain, France and Great Britain. Another way for Athens to secure access to strategic raw materials was through the Athenian cleruchiae, from as early as the late sixth century (O’ Halloran 2018, 142–143, 145, 147). A cleruchy was a specialized type of colony, which differed from the ordinary colonial settlement in that the settlers remained in close connection with their mother-city. The Athenian cleruchs retained their Athenian citizenship. Examples of other cleruchiae include Salamis and Chalkis, among others (O’ Halloran 2018, 178). The Themistoclean shipbuilding program also required large quantities of iron ore. According to Gabrielsen (1994, 131) and Amemiya (2007, 101), the shipbuilding program required the metallurgic sector to produce more than 100 tons per year – a substantial amount that must have given a great impetus to this sector. O’ Halloran (2018, 139), based on Thucydides (2.103.1, 3.50, 4.16.1, 8.19.3), argues that the Athenian Assembly decided each year on the number of ships to be built, in light of actual losses and gains and in accordance to expected needs as well as available resources. This discussion is, of course, also related to the lifespan of a trireme. The greater the lifespan, the less need for constructing new triremes to replace the older ones. According to Casson (1971, 90), the average actual life of a trireme was 20–25 years because of battle damages, weather and wear and tear. Acton (2014, 197) estimates that a trireme’s lifespan was approximately 25 years. The Athenians baptized their triremes with a large spectrum of names, including feminine gender names related to the word nike (victory) such as Kleonike, Kallenike, Pherenike, Aristonike, Axionike, Nicareste; conditions denoting power such as Hegemonia (hegemony) and Kratiste (most powerful); and, due to the widespread democratic conscience that they had developed, they even baptized their triremes with terms such as Eleutheria (freedom), Democratia, Parrhesia and Dikaiosyne (justice) (McArthur 2021).3 Economou and Kyriazis (2014, 2017, 2019) and Kyriazis and Economou (2015, 2019) analyzed why and how the values that were developed in the Greek phalanxes and the triremes were transferred into the field of politics. They found that values, such as athletics, political equality, polytheism, protection of property rights, etc., contributed significantly to the emergence of democracy in Classical Greece. Thus, as a final comment, the triremes and the hoplite phalanx were a “school of cooperation,” a “school of democracy” and a microcosm of the Athenian society among dissimilar elements of social stratification: the wealthy (high-ranking officers in the phalanxes and the commanders of the triremes), the medium-income citizens (hoplites in the phalanx and “marines” of the triremes) and the low-income citizens (who could serve mainly as thetes on the triremes or as psiloi, meaning “light infantry troops”). ​

58  Adopting a “Turn to the Sea” Strategy 3.2 Year 483/482 BCE: Themistocles’s Naval Decree: Exogenous Shock and Path Dependence and Change At the beginning of the sixth century BCE, despite a slow, ongoing process of transforming the economy toward the maritime sector from the time of Solon onward, Athens was still mainly an inward-looking city-state, with the great majority of its inhabitants making a living from agriculture (Figueira 2011; van Wess 2013). It had commercial ships as well as some warships, but it certainly was no leading trading or naval power, as archaeological evidence of the sixth century BCE outside of Attica has revealed. During the 480s, the Athenians and the rest of the Greeks were receiving more and more information concerning the Persian Empire’s ambitions to launch a second invasion of Greece.4 At the time, Athenian politics were strongly influenced by a visionary politician, Themistocles, who had no doubts concerning the true intentions of the Persians against Greece. Themistocles, the leader of the populist faction in Athens, foresaw that the decisive encounter of the forthcoming war would take place at sea. To counter such an enemy, the Athenians needed a mighty fleet.5 The problem was how to finance a fleet of about 200 trireme warships. The city’s revenues, consisting of public land revenues, custom duties, fines and war booty, were insufficient for such an ambitious task. Suddenly, in 483/482 BCE, during the archonship of Nicodemus, as a deus ex machina, the Athenians discovered an unprecedented rich vein of silver in the silver-mining district of Laurion, located in southern Attica, near Sounion. Income from this find reached the unheard-of figure of 100T per year (or 600,000 drachmae); at the time, one drachma was equivalent to a day’s wage for a middle-class worker (Loomis 1998). This amount was enough to be distributed at a flat rate of ten drachmae to every citizen annually. Themistocles intended to use this money to finance a fleet of 200 triremes to be constructed in two years – 100 each year. This force would be capable of defeating the fleet of the Aeginitans but, mainly, repelling the mighty Persian-Phoenician fleet’s imminent threat. However, he first had to persuade the Athenian citizens in the political arena. Herodotus (7.144) writes: The advice of Themistocles had prevailed on a previous occasion. The revenues from the mines at Laurium[6] had brought great wealth into the Athenians’ treasury, and when each man was to receive ten drachmae for his share, Themistocles persuaded the Athenians to make no such division but to use the money to build two hundred ships for the war, that is, for the war with Aegina. This was in fact the war the outbreak of which saved Hellas by compelling the Athenians to become seamen. The ships were not used for the purpose for which they were built, but later came to serve Hellas in her need. Essentially, economic theory could interpret this situation through the famous “butter versus guns” dilemma: according to Themistocles's proposal to the Assembly of citizens, the Athenians had to abandon their 10 drachmae windfall in favor of the public good of defense. Figure 3.1 presents a simple version of a production

Adopting a “Turn to the Sea” Strategy  59

Figure 3.1  The “butter versus guns” dilemma of the Athenians under Themistocles’s proposal.

possibilities frontier adapted to the Athenian case; the horizontal axis presents the production of public goods (Pub.Gs), whereas the vertical axis presents the production of private goods (Pri.Gs). Any movement from point A to B, etc., requires a sacrifice of private consumption for additional quantity of the public good of defense. Themistocles’s main political opponent was Aristides, the leader of the conservative aristocratic political faction mainly supported by the wealthier landowners and possibly also by medium smallholders whose revenues came from agriculture. On the other hand, Themistocles was supported by the low-income thetes, who, until that time, had limited political rights: they could vote in the Assembly but were excluded from occupying public office. Themistocles understood that he could convince the poorer thetes (who represented the largest social group) to vote in favor of his vast shipbuilding program if he could promise them full political rights and to secure for them permanent jobs as rowers in the state’s navy (Herod., 7.144; Plutarch, Them., 4.1–3; Arist., Ath. Const., 22.7; Κyriazis and Zouboulakis 2004, 99; Halkos and Kyriazis 2010, 259; Τridimas 2013; Economou and Kyriazis 2019; Economou et al. 2022). This was a very clever strategic move by Themistocles. He provided two very attractive stimuli for the thetes to support his naval program. In turn, the thetes grasped that they were being offered two objectively favorable conditions for a radical upgrade in their social position. Thus, on the back of the naval program, they demanded more political rights (Economou et al. 2022). Themistocles was aware that economic motivation was a pathway to shaping political or strategic choices. There was a conflict of interest between the aristocratic faction which, in a more general sense, was represented in the person of Aristides, and the lower social group, the thetes, who looked to Themistocles as the political leader who could potentially “upgrade” their social status. The thetes were oriented toward a

60  Adopting a “Turn to the Sea” Strategy “relationship of exchange” of civil rights and jobs in the navy with the provision of military service. Through Thucydides (3.14; 6.8, 31; 7.27), it is known that, during that time, a sailor thete was normally paid one drachma per day – similar to the pay of a skilled laborer or a hoplite (Loomis 1998, 32–61). It is also reasonable to believe that better-off citizens, such as medium-income farmers, would have less of an incentive to abandon their work for employment in the construction of the fleet. Thus, the people employed in the shipbuilding project came from the poorer class – the thetes. Modern authors, such as Downs (1957), have studied the strategic behavior of voters and have found that anticipated economic outcomes that can increase utility for a citizen or a group of citizens can play a key role in shaping their final preferences. Such an interpretation is related to public choice theory, which argues that there are pressure groups that influence decision-making on economic policy matters based on their interests. A subcategory of the theory is known as rent-seeking behavior: individual actors who belong to pressure groups (in our case, the thetes) act as self-interest maximizers in an environment of incomplete information and uncertainty (Krueger 1974; Tullock 1989). Furthermore, such groups have more bargaining power, allowing greater influence on policy decisions in their favor.7 After intense behind-the-scenes commotion, which contributed to the ousting of Aristides through ostracism, Themistocles managed to persuade his compatriots to build the fleet in preparation for a war against Aegina. It is obvious, however, that his real aim was to use the fleet against a much more formidable and imminent threat: the Persian Empire.8 Tridimas (2013) argues that the decision of the Athenians in favor of the public good of defense was based on a homo oeconomicus rational-thinking perspective. The decision to spend the funds for building a fleet proved essential to avoiding defeat by the Persian fleet at Salamis. So, did the Athenian thetes think opportunistically? Did they behave using a logic that one could nowadays be characterized as a clientelist behavior?9 Such behavior cannot be proven but cannot be excluded either. What is undeniably true is that after the influential intervention by Themistocles on the issue, the decision to resist was collective, and the provision for defense for the salvation of the homeland was considered to be the highest public good. The story of the Athenians asking the Delphi oracle regarding how to deal with the Persian threat is very well-known. Pythia, the Oracle of Delphi, linked the survival of their city with the building of “wooden walls” (Herodotus, 143.2–3.). Themistocles indirectly interpreted the Delphi oracle’s prophesy in a way that favored his naval strategy. By aptly interpreting the message of religion – that “wooden walls” meant ships – he managed to convince the majority of the Athenian demos that their survival was directly linked to the building of a powerful fleet. The decision was not an easy one because if defeated by the Persians, which was the most probable scenario, the Athenians and the other Greeks would lose their freedom and citizenship rights and become, at best, mere vassals of the empire and, at worst, slaves.10 Therefore, in the matter of the well-known “butter versus guns” dilemma, Themistocles convinced the Athenians to choose the funding of military preparations for the salvation of the homeland. It appears that the decision of the

Adopting a “Turn to the Sea” Strategy  61 Athenians (in general) to resist the Persian onslaught was the result of a cost–benefit logic, seeing this through a rational choice point of view. The majority of the Athenians were convinced by the well-justified arguments of Themistocles. When around 483/482 BCE, the clouds of war began to gather and the news of the invincible Persian flood did not allow much doubt about the next step and the real intentions of the Persians, it became clear that the Athenians’ choice to fund the public good of defense instead of further personal annual consumption was wise. Themistocles’s fleet, which comprised almost two-thirds of the entire Greek fleet, saved Greece, Europe and the Western world, as it defeated the mighty Phoenician-Persian fleet in the naval battle at Salamis in 480 BCE (Strauss 2004, 7–8; Economou et al. 2022). As Plutarch (Them., 4) notes, the salvation which the Hellenes achieved at that time came from the sea, and that it was those very triremes which restored again the fallen city of Athens.11 In his History of Economic Analysis, J. Schumpeter ([1954, 7], 2006) observes that fiscal decisions can prove critical for dramatic socio-economic changes throughout history. The Themistoclean “turn to the sea” strategy belongs to such a category of historical events. Under the same reasoning North and Thomas (1973), in their book The Rise of the Western World, argued that, from an institutional point of view, among others, institutions change when there are gains for doing so. A perceptive leader, Themistocles understood that the future for the Athenians was at sea. Although it is not written explicitly in the ancient sources, it is quite possible that Themistocles also tried to persuade, at least to some extent, the wealthier Athenian classes, using a logrolling of interests12 logic (Buchanan and

Image 3.2  Greek phalanxes in collision. A part of the famous Chigi vase depiction. Source: https://commons​.wikimedia​.org​/wiki​/File​:Detail​_from​_the​_Chigi​-vase​.jpg.

62  Adopting a “Turn to the Sea” Strategy Tullock 1962, 265–267), that accepting his “turn to the sea” strategy would also benefit them in the long-term because of the prospected gains from international commerce after the possible rise of Athens as a maritime power. Perhaps what happened with Themistocles’s naval program is, more or less, similar to the necessities of the European nations after WWII. Jean Monnet – one of the “Fathers of Europe,” the visionary of the European Coal and Steel Community (1951) and the European Economic Community (1957), both forerunners of the current EU – very eloquently argued, among others, that: People only accept change when they are faced with necessity, and only recognize necessity when a crisis is upon them.​ 3.2.1 Choosing between Two Paths: A Mathematical Formulation

The above analysis regarding the decision of the Athenians to “turn to the sea” can be further explained in Figure 3.2 and the simple mathematical formulations that follow. In our case, Athens faces a grave external threat. In Period 1, Athenian decision-makers select one of two strategies: either to continue on the old path (A → B) – that is, the old strategy, not to change the basic agricultural production model that the economy follows – or to follow a new path, (A → C) – that is, to transform the production base from a mainly agrarian productive structure to a maritime, manufacturing and financial services type of economy as happened after accepting Themistocles’s proposal. Even if the Athenians finally choose the new path, they can return to the old regime, which drives to point D. If they decisively select to continue on the new path, this leads to point E. In each

Figure 3.2  Choosing between two different strategies of economic policy.

Adopting a “Turn to the Sea” Strategy  63 period they decide whether they will move along C → D or C → E. Figure 3.2 illustrates the two different strategies. The decision made at each time period depends on the calculations of individual welfare by the decision-makers, in which welfare includes not only prospected economic benefits but also an ethical system of values such as freedom, patriotism and religion. For moving from A to B, the individual decision-makers must calculate their welfare ex-ante, as at Point A, they do not possess any exact experience of their prospective welfare if they move to C. The conditions for making a move from A to C, instead of remaining on the old path, are:

wCj  w Bj j  1, 2  m  1,  n

(3.1)



n m 1   , 2

(3.2)

where n is the overall number of decision-makers, m is the median voter in the group of decision-makers, wCj is the expected net welfare of individual j if he chooses the move to C and wBj is his expected net welfare if he decides to move to B. When decisions are made under democratic procedures in the Assembly of citizens, if there are m + 1 voters whose expected net welfare from choosing the path A → C is higher than their expected welfare from staying on the path A → B, the decision in Period 1 is made to move in the direction of A → C. Once citizen-voters are at point C, during Period 2, just a bit later after creating the mighty fleet that defeated the Persians at Salamis, all decision-makers calculate their individual welfare and compare it to their expected welfare if they had chosen B instead of C. If their realized net welfare at C is higher than their expected net welfare at B, and if their expected net welfare for the next period under the new regime is higher than the expected net welfare under the old regime, then they will choose to continue moving along the new path, from C to E, instead of trying to rejoin the old path at D. And as long as movement along the new path is accepted by the Athenian society and is not interrupted, it leads to a gradual creation of a new path dependence situation in the long run. With each additional move along the new path, the probability of going back to the old path during one of the subsequent periods decreases. 3.2.2 Maritime Infrastructure and the Shipyards of Attica

Building and running triremes required substantial manpower. The 200 Athenian triremes that were used in the naval battles of Artemision and Salamis must have required 40,000 sailors, rowers and officers, a huge percentage of the total manpower of the polis. O’Halloran (2018, 249–250) believes that the need for 40,000 sailors and officers could not have been covered only by mobilizing low-income thetes. He further provides information on fleets of later times when metics were also used as rowers.

64  Adopting a “Turn to the Sea” Strategy There was a need for manpower, and this could only have been supplemented by metics – perhaps one metic for every 5 thetes. Akrigg (2019, 65–66) goes even further, arguing that even slaves were used at Salamis. However, this is a dubious notion in the absence of any relevant data, although such a possibility cannot be excluded with absolute certainty. Casson (1971) and Morrison et al. (2000), for example, argue that slaves were not used in the triremes except under special circumstances such as in the case of the naval battle of Arginousae in 406 BCE. Akrigg (2019), Figueira (2022) and Lyttkens and Gerding (2022) provide further analysis on this. The running of these warships required the transfer of a large percentage of the labor force from the agricultural to the “secondary” sector of the economy. Of course, agriculture remained a very important sector of the economy (Bresson 2016), but this gradually changed to such an extent that, as Cohen (1992), Gabrielsen (1994, 24–38), Amemiya (2007) and Halkos and Kyriazis (2010, 256) argue, the Athenian economy became the first “modern” economy in which handicrafts, maritime commerce and services contributed more to gross domestic product (GDP) than the primary sector.13 Therefore, from an economic point of view, this new strategy of “turning to the sea,” contributed to the abandoning of the specific character of the Athenian economy as agrarian. Undoubtedly, the construction of 200 triremes in just two years was a colossal defense program of expansionary fiscal policy. This played an important role in the further transformation of the Athenian economy and the achievement of economic growth. The need to create this new maritime infrastructure led to the emergence of many production sectors that either arose for the first time or, according to Gabrielsen (1994, 19–23), Figueira (2011), van Wees (2013) and Acton (2014, 197–201, 2016, 156), pre-existed from pre-Classical times but were now significantly expanded, such as timber (for the production of ships, oars, ladders etc.), iron and bronze workshops (for the rams of warships and special nails to

Image 3.3  Τhe Tomb of the Salaminian Fighters, Kynosoura, Salamis. Source: Photograph by the author.

Adopting a “Turn to the Sea” Strategy  65 connect the different parts of the ships, etc.), forges, shops for rope-making and paint-mixing and a variety of other products related to the maritime economy such as hemp, pitch and flax (Kyriazis and Zouboulakis 2004; Economou and Kyriazis 2019; Kyriazis and Economou 2019). The Themistoclean program constituted a major upgrade to the existing infrastructure for naustathmoi (dockyards) and neosoikoi (shelters for guarding the ships), anchorages and marine installations, etc. The most well-known of these dockyards were those of Zea (in today’s Pasalimani) and the smaller ones of Mounichia (in today’s Microlimano) and Kantharos (the cove opposite the Piraeus train station today). These dockyards had the capacity to accommodate up to 500 ships, a very large number. Other famous dockyards were those of Samos, Corinth, Corfu, Syracuse, etc. (McArthur 2021). The trade harbor of Kantharos and Zea and Mounichia naval bases were developed sometime after 479 BCE. The Kantharos port was surrounded by porticos that provided traders and sailors arriving in the polis a wide range of facilities (Bresson 2016, 90). McArthur (2021) explains that the Themistoclean colossal shipbuilding program was undertaken by experts in shipbuilding known as naupegoi (shipwrights), under the supervision of their superiors, known as architektones epi tas naus (naval architects) who were in charge of the project of the triremes’ shipbuilding. A naupegos (shipwright) practiced a woodworking trade, using tools such as the compass, straight edge, chalk line, carpenter’s square and auger. Other craftsmen of various sorts worked alongside the naupegoi (p. 494). Acton (2014, 199) estimates that, at the rate of 20 new ships a year, shipbuilding might have employed about 400 people in total and, perhaps, a few hundred more in repairs and maintenance of older ships. These included naupegoi, carpenters, ship workers, painters, dealers of oakum, ropemakers, metalworkers, ironworkers etc. Painters were also used because the hulls of ancient ships sometimes were painted and decorated with symbols as well (McArthur 2021, 496). Every shipbuilding project of new a trireme was run under the supervision of an architekton epi tas naus (naval architect) by leading a team of craftsmen as they assembled the ship (p. 494). Such a post required great skills and was associated with many demanding duties such a drawing up rudimentary sketches, supervising the whole process, overseeing intensive ship repairs, etc. Only a few people were capable of undertaking such tedious tasks. In various poleis the architektones occasionally garnered civic recognition for their work. All architektones were naupegoi, but not all naupegoi were architektones (p. 502). Like the naupegoi, the architektones were Athenian citizens based in Attica.14 They were elected to their post after giving speeches before the Athenian Assembly. This Athenian practice was introduced to ensure that the most capable architektones were chosen (p. 482). A vote by the demes of their origin selected the naupegoi. The particular task of shipbuilding took place in a naupegion (shipyard). There were various naupegeia (shipyards) throughout Attica. The so-called naupegoi of neorion presumably worked in state-owned facilities within the neorion (naval base) in Piraeus. Other naupegoi likely worked independently, outside the sphere of state control and, perhaps, outside the neorion (p. 494), as private shipyards

66  Adopting a “Turn to the Sea” Strategy were also present in Attica. McArthur (2021, 494–495) believes that private shipyards may have occasionally taken on contracts to build triremes for the state, but their production did not focus on producing warships but, instead, on merchant ships, fishing boats and ferries. The whole process of the shipbuilding of triremes was supervised by the ten trieropoioi, a subcommittee of the Council tasked with shipbuilding administration and finance (p. 503). This was imperative to ensure that the Athenian (state) navy would receive high-standard warships. In general, the whole shipbuilding process was under the auspice of the Council, which was also responsible for the proper running of the naval bases. As a final comment, the transformation of the Athenian economy in Classical times from an agrarian into a maritime economy was accompanied by adopting new and innovative methods of production or the advancement of the pre-existing ones, at least to some extent. I believe that the following view of Schumpeter (1928, 378) applies to Athens at the time: What we, unscientifically, call economic progress means essentially putting productive resources to uses hitherto untried in practice, and withdrawing them from the uses they have served so far. This is what we call “innovation.” 3.2.3 The Athenian Fiscal Expansionary Policy for the Public Good of Defense

The Greco-Persian wars altered the relationship between economy and warfare and shaped the grand strategy of the city-states of the Greek world. The construction of the Athenian fleet and the Persian Wars gradually changed both the nature and the magnitude of the military conflict in both economic and military terms (Serrati 2013, 322–323). This was also observed by Thucydides (Kallet-Marx 1993). The positive reverberations in the Athenian economy of the fifth century BCE due to Themistocles’s vast shipbuilding program can be seen in Figure 3.3. This assumes (according to a Keynesian theory perspective15) that the prices of goods in the Athenian market, in the short run, remained stable, showing flexibility only in the long run. In the figure, this is represented by the line P1P2, which is a fixed and horizontal line that represents the constant level of prices during the short period. In the case of the Athenian state, it means that the prices of goods and services in the Athenian market could change significantly only in the long run. The crucial element of Figure 3.3 is what happens with aggregated demand (AD). A significant successive increase in demand for raw materials (timber, iron, bronze, etc.) for the construction of triremes leads to a shift in the aggregate demand curve from AD1 to AD2 and AD3 consecutively, and in the supply of new goods coming from shipyards, blacksmiths, carpenters, paint shops, sail shops, shield factories, food supply shops, etc. This causes a significant increase in the overall income of the economy (what we call national GDP in today’s terms) due to increased production, from Y1 to Y2 and Y3, consecutively. Figure 3.3 is a simplistic but useful visual representation which exhibits the positive effects that institutional change had in the Athenian economy, within a modern

Adopting a “Turn to the Sea” Strategy  67

AD 2

ΑD1

AD 3 Shipbuilding of 200 triremes

Ρ1

Ρ2

Y1

Y2

Y3

Figure 3.3 Fiscal expansionary policy and short-term growth.

perspective: the Keynesian interpretive approach regarding the level of production and income growth that resulted from the implementation of Themistocles’s naval program. Themistocles, who was the mastermind behind the rapid transformation and the rise of the Athenian economy in a short period of time, laid the foundations for long-term growth. Therefore, the conclusion is that the sudden rise of mass demand for raw materials and manufactured products in large quantities, to build 200 triremes in two consecutive years, would directly increase Athens’ economic turnover16 for the years 482/481, thus, stimulating the city-state’s economic growth in the long run.17 This historic transition from a land-based rural economy to an extroverted one based on trade linked to the sea was the work of a great and far-sighted leader. It is certain that in the case of Themistocles, the saying attributed to the famous German Chancellor Otto von Bismarck is valid as well: Political judgment is the ability to hear the distant hoofbeats of the horse of history. 3.3 The Trierarchy 3P Institution and the Antidosis Procedure This section deals with the trierarchy and the antidosis procedures. Trierarchy was the most expensive of the liturgies (Dem Ag. Meid; Against Polycles), whereby

68  Adopting a “Turn to the Sea” Strategy a wealthy Athenian undertook the task to cover the cost of logistics support and maintenance of a specific trireme so that it was fully operational for a year. Liturgies were special taxes levied on wealthy Athenians for the purpose of providing a public–private partnership for the provision of a public good (3PPub.Gs) to the benefit of the state.18 According to Gabrielsen (1994, 26–39) and Christ (2006, 156), the institution of liturgies was probably introduced in 494 BCE on Samos and was adopted by Athens (Kyriazis and Zouboulakis 2004, 120) either shortly before or shortly after the second phase of the Persian Wars (480/479 BC). Kaiser (2007, 448) and Lyttkens (2013, 79) write that by 480 it is clear that Athens developed this institution for the provision of impure public goods ranging from choregia to the trierarchy. This system probably stemmed from the democratic reforms of Cleisthenes in 508/507. Trierarchy proved to be a successful public–private partnership (3P) program in the national defense because it was seen as a 3PPub.Gs, if we interpret it through modern economic terms and according to the definition of Besley and Ghatak (2017). In general, 3Ps consist of cooperative institutional arrangements between public and private sector actors in which private parties are committed or contribute partially to the delivery of various public services, such as public goods. Since the 1980s, 3Ps have become increasingly popular and are now used widely across the world. 3P practices were applied for the first time in the ancient Greek world and especially in Classical Athens.19 The annual maintenance cost of the trierarchy was 6,000 drachmae. Eligibility was based on the formal rule of property qualification, according to Solon’s and Cleisthenes’s constitutional reforms of 594 and 508 BCE. The trierarchy system was the evolution of the naukrariai system. Figueira (2011, 191–192, 2022) writes that Themistocles’s Naval Decree ended the system of naukrariai. The cost of building the basic superstructure (the hull) of a trireme ranged between 4,000 and 6,000 drachmae. This cost was covered by the Athenian public (Christ 2006, 146). In fact, several additional factors influenced the determination of the final cost of construction (e.g., change in the cost of materials over time). The Athenian state also undertook the payment of the crew of 200 members of the ship. From the public coffers, the sailors were paid a daily wage of 1 drachma for eight months of service (Loomis 1998, 56). Feeding the crew for a month required approximately an extra half of a talent – 3,000 drachmae (Gabrielsen 1994, 122). Crew members might also have received epiphorai, i.e., an additional payment given by the trierarchs (at their own expense) to further encourage their trust, cooperation and efficiency (Thuc. 6.31.1–3). Alternatively, epiphorai could come out of sharing loot and from the spoils of war (Günther and Hahn 2019). In principle, almost every trierarch considered it an honor to command a trireme. This does not deny that undertaking trierarchy was a very costly obligation for even the wealthiest citizens. Davies (1981) estimated the annual cost for trierarchy at between 4,000 and 6,000 drachmae (or 0.7 to 1T), which would approximate the lifetime income of a skilled worker, while Gabrielsen (1994, 45) estimated a range of 3 to 4T. Because of the high cost of undertaking a trierarchy,

Adopting a “Turn to the Sea” Strategy  69 someone who had undertaken it for one year was not required to do so again the following year (Thorley 1996, 43). Later on, during the second half of the fourth century, as trierarchy had become very costly even for wealthy citizens, the Athenians realized the limitations of this system, both from a “fairness” and practical point of view. By acknowledging this, in 358, they decided to link the financing of trierarchy with the institution of symmoriai, introduced in 378 to collect the eisphora tax (Hansen 1991, 112–115), as will be further analyzed in Section 8.9.1. The whole functioning of the trierarchic system was supervised by one of the 10 strategoi – the strategos on the symmories – who was assigned the task of certifying that each ship was deemed navigable before being accepted by the navy. This should have been done very carefully, otherwise, he would face serious charges. It appears that the Athenians introduced this institution in order to also deal effectively with another intertemporal issue, as raised by the eminent economist Arthur Cecil Pigou, among others: how should the costs of military funding be divided among the different social groups, given the different income dynamics of each. Pigou (1916) believed that to solve this problem equitably, the strongest income groups should bear most of the cost of financing the war. The Athenians shared this view. That is why they introduced the institution of the trierarchy, which can be characterized, under a modern interpretation, as a highly progressive tax, burdening the wealthier citizens. The process of trierarchy included three elements related to its success. At first, Lyttkens (1997) and Christ (2006), through a behavioral perspective, consider that, in addition to altruism and patriotism, the main motivation for the trierarchy’s acceptance by the wealthy Athenians was the acquisition of political benefits and the favor of the demos, while Kyriazis (2009, 124) considers trierarchy as a “mixture” of altruism and personal interests. For the system to be effective, it should have cracked down on any cases of corruption. According to Demosthenes (Against Polycles, 65) and Aeschines (Against Ctesiphon, 17, 19) the Athenian demos could prosecute ship-commanders who were suspected of embezzlement. In order to avoid such accusations and prosecution, a trierarch needed to hold an accurate record of what he had paid to his sailors (Demosthenes, Against Polycles, 65). A prudent trierarch should be keeping records with crew lists and the sums of money he paid them, as all his actions were subject to eventual review by the Athenian authorities. Regarding this, Strauss (2000, 272) characteristically argues: Who would want to face a potential lawsuit without appropriate documentation as protection, without, as it were, a paper trail, to use the current language of Anglo-American public life? According to Demosthenes (Against Polycles, 50.39–40, 68), a trierarch had to serve longer than he was legally required if his replacement was running late. In this case, he had the right to ask the new trierarch to reimburse him for the expenses he incurred after his legal term. During the delivery–receipt procedure of a trireme from one trierarch to another, if the vessel had defects, the former trierarch had to

70  Adopting a “Turn to the Sea” Strategy make all required repairs. Only after the strategos on symmories approval, the ship was accepted again by the navy as seaworthy. Any improvements or additional expenses burdened the former trierarch (Gabrielsen 1994, 125; Economou and Kyriazis 2017). On the other hand, a newly appointed trierarch would assume control of his assigned naval gear, whether from a previous trierarch or directly from the naupegoi; the difference being, presumably, that the naupegoi would distribute equipment to those trierarchs assigned brand-new ships (McArthur 2021, 494). Second, trierarchs that undertook command duties had every reason to be committed to the proper maintenance of the warship; in case of war, any omission was likely to cost them their own lives! It is obvious that, in this way, the institution of the trierarchy ensured, at least in theory, a significant degree of operational efficiency of the Athenian fleet by linking the successful completion of the construction project with the personal fate of the trierarch. Although a trierarch was relieved from active military service at the age of 60, his undertaking of the cost of a trierarchy was for life (Gabrielsen 1994, 87, 200). Third, it was already argued that the naupegeia where the triremes were built did not only belong to the state but were also private enterprises. Through the shipbuilding programs that the Athenians launched for all the Classical period, the Athenian state essentially indirectly enabled all those involved to acquire knowhow and technical experience. With these projects, executed for the benefit of the state, a competent architekton-contractor who acted on behalf of either a state or a private naupegeion, “experimented and learned.” This knowledge had a reciprocal character, as it could be useful to the architekton-contractor as well as the naupegoi under his supervision. In modern terms, such a procedure is described by Arrow (1962) as “learning by doing.” This actually means that learning acts as a way of improving products or reducing their production cost as specialized skills and knowledge are accumulated through the production procedure. Specialized skills can increase productivity, including reductions in the production costs, producing higher quality products and, thus, achieving economies of scale (Krugman et al. 2018). And this is exactly what happened with the case of trierarchy, as is described here. Table 3.1 includes an estimation of how much the maintenance and combatreadiness of a trireme cost the Athenian public and the private contractor-trierarch. Table 3.1 assumes eight months of service for the trireme, as during the winter months, there were no naval battles, and any patrols would have been quite limited Table 3.1 The annual cost of a running a trireme Costs to the individual (trierarch) Costs to the public Payment of crew salaries Cost per day Cost per month (30 days) Cost per year (eight-month service) Total cost (public and private expenditure)

4,000–6,000 drachmae per year ≤ 1.5T 200 drachmae 6,000 drachmae (1T) 48,000 drachmae (8T) Between 52,000 and 54,000 drachmae, or between 8.66 to 9T

Adopting a “Turn to the Sea” Strategy  71 due to inclement seas. The numerical cost resulting from Table 3.1 amounts to between 8.66 to 9T. If one accepts Gabrielsen’s (1994) estimations, the total cost of running and maintaining a trireme was even higher; it varied between 11 to 12T a year. This cost justified the popular nickname given to these warships as adephagai (voracious) triremes. Kyriazis (2009, 119) adds that, intuitively, Athenian citizens perceived that the economic benefits from the impressive development of international maritime trade were not available equally to everyone. This kind of economic development almost benefited all inhabitants but to different degrees. Shepherds, farmers and landowners, for example, benefited from higher prices due to greater export demand for their highquality goods, such as the famous honey from Mt. Hymettus. But they profited much less than urban craftsmen, “manufacturers,” ship-owners and sailors, who were the direct beneficiaries of the growth in international maritime trade. The introduction of trierarchy ingeniously solved this problem; through the system of liturgies, the costs and benefits were, to a large extent, internalized. The wealthy groups of “manufacturers” and ship-owners, who benefited the most from the provision of defense as a public good and the naval fleet, had to suffer a proportionately higher burden for it.20 However, it also has to be acknowledged that, due to high costs regarding the efficient implementation of trierarchy, cases of tax evasion have also been recorded. Carmichael (1997) argued that the effectiveness of trierarchy began to decline over time, as the wealthy former aristocratic families came to realize that the cost of financing the ships exceeded the compensatory benefits they gained in terms of personal political and social prestige. There were also phenomena of wealth concealment to avoid liturgies – especially the costly trierarchy, mostly by those whose wealth was less compared to the very rich (Gabrielsen 1994, 108; Christ 2006, 157–158). Remarkably, those whose property was related to either money or movables (aphanes ousia) could conceal it much easier than the Athenian landowners for obvious reasons. Such a situation could give a false picture of the real status of wealth among well-to-do citizens. In this light, liturgies could also be seen as a process of “compulsory donation” that burdened the wealthy, not all of whom were inclined to participate actively in this institution (Carmichael 1997; Christ 2006). Because of such phenomena, in 362–361 BCE, due to the financial inability of many Athenians to bear the cost of a trierarchy, the syntrierarchy (joint trierarchy) was introduced in which two wealthy citizens would alternate the duties of a trierarch every six months (Thorley 1996, 43). Refusal on the part of individuals to undertake this obligation was a punishable offense. However, as has already mentioned, in the event a co-trierarch did not show up to take over his ship for his term of office, the previous co-trierarch remained at his post. In such a case, the cotrierarch could denounce his alternate to the strategos commanding the trierarchy and sue him, seeking compensation for any expenses incurred after his own term had officially ended. A co-trierarch was obliged to deliver the ship intact and ready for war to his counterpart; if this did not happen, the case ended up in court. Such cases had a public impact, as they could distort the city-state’s fighting capacity (Demosthenes, Against Polycles, 1, 20, 32, 36, 39, 41–42, 57).

72  Adopting a “Turn to the Sea” Strategy In the year 358/357, due to the various inefficiencies observed in the syntrierarchy system, at the suggestion of a citizen named Periandros, the system of symmoriai, related to the taxation of well-to-do citizens by groups, was extended to the trierarchy. A list was created of the 1,200 wealthiest citizens named synteleis (contributors) who were responsible for covering the expenses of the trierarchy. These were divided into 20 groups of 60 members. Each synteleia included five of the 1,200 well-to-do citizens (Dem., On the Navy; Davies 1981, 19; Hansen 1991, 113–114; Gabrielsen 1994 48–50, 84, 157–160, 178–179, 182–190, 198–199, 212–215; Lyttkens 1994, 75–76; Κyriazis 2009, 114; Kaiser 2007, 459; Οber 2008, 128; Canevaro 2018; Günther and Hahn 2019, 185). This law which connected symmoriai to trierarchy remained in force until 340, when it was superseded, but not entirely, by another relative law proposed by Demosthenes (Gabrielsen 1994, 182). Wealthy metics were also eligible to cover some festival liturgies (Demosthenes, Against Leptines, 20.18; Lysias, Lys., Ag. Er., 12.20). The information that Demosthenes (Against Leptines, 20.20) provides is not very clear. However, Gabrielsen (1994, 60, 240–241 ftn. 25) and Canevaro (2018) believe that metics were excluded from trierarchy. As a result, 240 synteleiai were created, and each had to maintain one trireme. The syntrierarchy now put five wealthy citizens liable per boat instead of two (Andreades 1933, 324). In 349 BCE, at the suggestion of Demosthenes, a new law determined that every wealthy person with capital of 10T or more was obliged to maintain a trireme. The less wealthy remained members of the synteleiai. To belong to a synteleia group, a man had to have property worth at least 3 or 4T. No one was forced to be a trierarch for two consecutive years, but some, out of patriotic zeal, did so. The trierarch kept detailed accounts for his ship stating the purpose of the expenses, at what prices, and in what currency the goods and other relative expenses were paid, providing the co-trierarch that was about to replace him and the Athenian state authorities, through the strategos of the trierarchy, with a clear picture regarding the financial status that accompanied that particular trireme (Demosthenes, Against Polycles, 30). In general, those undertaking the upkeep of triremes took care to maintain their ships well and even repair them accordingly (Thuc., 6.31). A well-maintained trireme was, after all, a sign of prestige for the trierarchs and were even exploited by those who had aspirations to promote their political prestige (Christ 2006, 146). This section finishes with the so-called antidosis procedure that could be seen as a derivative of trierarchy. The nature of this institution is also strongly related to the issue of property rights protection. Any Athenian who was charged with taking on a costly liturgy, such as trierarchy, could avoid it by nominating a richer man who was (ostensibly) more qualified than himself (in terms of property assets) to perform it. In such cases, the nominee could either accept the trierarchy or refuse it. But refusing to undertake the trierarchy meant that he could be sued. A special court was tasked with resolving the case, examining detailed lists of the assets of the two interested parties, which they themselves completed and submitted to the court. During the trial (it took place once a year), all the property of the two citizens was examined – estates, houses, money, movable and non-property items as

Adopting a “Turn to the Sea” Strategy  73 well as slaves, animals, etc. (Isocr., Antidosis; Dem., Against Phaenippus, 42.12; Lysias, On a Wound by Premeditation; Xen., Oec., 7.3; Gabrielsen 1994; Τhorley 1996, 15, 43; Christ 2006; Οber 2008, 129–130; Lyttkens 2013, 112). Antidosis was, therefore, an indirect way of revealing the real property of wealthy citizens. When a citizen was forced to exchange his property through antidosis, based on a court decision, he was deemed dishonorable because it was felt that while he had a higher income than the complainant, he did not undertake the trierarchy, disproportionately burdening the complainant, attempting to cheat by avoiding contributing financially for the common good. Such behavior often led to a social outcry against the perpetrator in a face-to-face society such as Athens. Antidosis was, therefore, an institution in which property rights were further linked to various societal and moral aspects. It is possible that antidosis, in addition to the beneficial consequences of disclosing taxpayers’ wealth, had a negative side effect: forcing an individual to enter into a process of possible exchange of his property through a judicial dispute, possibly created animosity among citizens. This could disrupt social cohesion. Andreades (1933, 294) considers antidosis to be a smart and unique institution, while Mitchell ([1940], 2014, 381), on the other hand, considers it clumsily designed. However, as far as is known from the ancient sources, there is no evidence of disruption in social relations as a consequence of antidosis. After all, it appears that antidosis rarely took place. Some scholars even doubt whether an actual exchange of property ever took place, although indisputable evidence about antidosis comes from Lysias (On a Wound by Premeditation, 4.1). 3.4 The Athenian Thalassocracy during the Classical Period: A Defense Economics Perspective After repelling the Persian threat, Athens founded the Athenian Alliance to further neutralize Persian influence in the Aegean Sea and the East Mediterranean. The maintenance of the Athenian fleet required substantial military expenditure, covered mainly by the revenues of the Allied Fund of Delos. Athens introduced military innovations, i.e., reducing time in transferring military forces, long-distance military campaigns requiring more manpower and new combat tactics. Logistical support was enhanced and included slaves, servants, herds of animals, supplies for soldiers, tools, tents and medical equipment (Thuc., 6.22; Gabrielsen 1994, 45, 124, 139–140, 2013, 333; Serrati 2013, 322–323). Logistical support is, after all, crucial to successful military operations in the battlefield, and this is an intertemporal axiom that applies also to the case of Ancient Greece, Rome, etc. Maintaining the large Athenian fleet created the need to access friendly ports to purchase supplies, resulting in expanded business for local suppliers. According to O’ Halloran (2018, 157), even private merchant ships accompanied expeditions, such as the Sicilian Campaign, providing handsomely profitable re-supply of the fleet. The Athenian fleet was, to a large measure, a “floating economy.” This phenomenon has been mirrored in recent times when, for example, during the Cold War, units of the US Mediterranean-based sixth NATO fleet, which, when harbored

74  Adopting a “Turn to the Sea” Strategy at the port of Piraeus and elsewhere, supported the local economy. In times of war, such as the Peloponnesian War, this phenomenon was even more pronounced. To characteristically depict the vast requirements in manpower of fleets, one needs only mention the strategic debacle at Aigospotamoi (Goat Rivers) in which the Athenians suffered in a surprise attack by the Spartans which destroyed 160 triremes. According to Xenophon (Hellenica, 2.1.25–28), at the time of the raid, the Athenian sailors were away shopping in a nearby market! The oarsmen alone – not including officers and marines – would have numbered 27,200 souls (160 triremes x 170 oarsmen). As was already mentioned, the construction and maintenance of a trireme were very expensive. In addition to the oarsmen, compensation for experienced staff (sailors, helmsmen, etc.) in times of war, such as the Peloponnesian, could be very high. The Corinthians and the Spartans were both obliged to form a fleet to oppose the Athenians, but due to their lack of necessary resources, they were forced to turn to the Persian Empire for financial support. Even though the Spartans won the Peloponnesian War (431–404 BCE), thanks to their charismatic leader, the admiral Lysander, they did not carry out the necessary socio-economic policies and military reforms which that particular historical conjuncture required. Because of this, Sparta, as a socio-economic regime and geopolitical power, gradually started to decline (Serrati 2013, 326–327; Halkos et al. 2022). Therefore, the parameter of the economic dimension of the war should in no case be overlooked. The view that economic power plays a catalytic role in the defense capabilities of a state and the outcome of war has been supported by many contemporary researchers in disciplines such as defense economics and international relations theory in general. To read more on this, see the seminal works of Knorr (1956), Gilpin (1981), Polachek (1994), Mansfield (1994), Kollias (2017), Kyriazis et al. (2018) and Economou (2020), among others, as well as the references that are provided therein. Kennedy (1987) for example, in his important book The Rise and the Fall of Great Powers, convincingly argues that great powers throughout history have always been great economic powers. This also applies to the case of Classical Athens and its “empire” through the Athenian Alliance. The member city-states of the Alliance contributed significant amounts of money so that the mighty Athenian fleet became dominant in the Eastern Mediterranean during the pentekontaetia period (478–431 BCE) (Figueira and Jensen 2019; Figueira 2022). Pigou (1916), Keynes (1919), Carr (1939) and Gilpin (1981), in their seminal works, note that changes in the relative economic strength of states affect the balance of power between them and drive their geopolitical and geoeconomic ambitions. This was also true between Athens and Sparta and their coalitions during the pentekontaetia period. Due to the rapid economic and military rise of Athens during that time, the Spartans feared that this would overturn the balance of power between their city-state and Athens. Thucydides (1.118.2) characteristically explains that the Spartans feared that they would progressively lose their leading role in Greek affairs to the Athenians. Thus, Sparta sought for an occasion to declare war on Athens while it continued to maintain the power advantage,

Adopting a “Turn to the Sea” Strategy  75 resulting in the Peloponnesian War (Gilpin 1988; Kallet-Marx 1993). Under such a perspective, one could find some parallels with today’s geopolitical status between great powers: on the one hand, the United States, the current superpower, and the People’s Republic of China, a would-be superpower. Furthermore, military antagonisms between strong powers, as that between the Athenians and Spartans and their coalitions, can lead to arms races that, in the end, can be detrimental for every participant by undermining their future fiscal status. In modern times, the arms race between the two superpowers – the United States and the Soviet Union – harmed both economies, especially that of the latter exacerbating its collapse as a regime. However, the fiscal consequences for the United States proved also very significant, leading to the gradual and long-term rise of the its public debt, leading to a catastrophic clash between them (such as the Peloponnesian War).21 This is, in fact, another intertemporal lesson that derives from the study of Ancient Greece. US President Franklin D. Roosevelt warned Congress in January 1942 that: “War needs money,” before launching the largest war budget in history up until that time ($56 billion). In his Chance for Peace speech, addressed on April 16, 1953, shortly after the death of Soviet dictator Joseph Stalin, US President Dwight D. Eisenhower warned that: Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children…This is not a way of life at all in any sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron. The ancient Greek philosophers had understood the nexus between economic and military might. Thucydides (1.83.2–3), through the mouth of the Spartan King Archidamus, conveys this: The Athenians have allies as numerous as our own, and allies that pay tribute, and war is a matter not so much of arms as of money, which makes arms of use (emphasis in bold by the author). And this is more than ever true in a struggle between a continental and a maritime power. First, then, let us provide money, and not allow ourselves to be carried away by the talk of our allies before we have done so. Here, Thucydides also raises another intertemporal dimension of investing in sea power: building and running a navy is quite an expensive proposition. This also became evident at later times, for example, with the Roman and the Byzantine Empires, Venice, Genoa, the Spanish Empire in sixteenth century, England, the United Provinces, Great Britain and, today, the United States. Thucydides’s call for sea power is related to the classical dichotomy between heartland versus rimland and continental versus maritime power as defined in the seminal works of the geostrategists Mahan ([1890], 1980), Mackinder (1904) etc.

76  Adopting a “Turn to the Sea” Strategy Plato (Phaedo, 66c) also understood the direct link between economic potential and military power, noting that: For all wars arise for the sake of gaining money, and we are compelled to gain money. Demosthenes (Olynthiac 1, 1.20), regarding the necessity of war preparations, writes that: Only money we must have, and without money, nothing can be done that ought to be done. Furthermore, Aristophanes, in his theatrical play Wealth, provides various passages in which he indirectly explains the nexus between economic and military power, while, in Lysistrata, the Spartan female fictional character Lampito asserts that the Athenians will never cease wanting to fight (173–144) “while they have triremes prepared to sail and silver.” That’s why Kallet (2007, 75) correctly argues that the Laurion silver mines were the catalyst of Athenian naval power. Under such a context, Table 3.2 lists the ceilings of naval forces of the Athenian Alliance (mainly the Athenian navy), compared to those of its main geopolitical rival, Sparta, and its allies (the Peloponnesian League) i) during the second round of the Greco-Persian Wars (480/479 BCE); ii) the period of the rise of the First Athenian Alliance (478–431) and the Peloponnesian War (431–404), destructive for both coalitions, which, although it ended with the ephemeral victory of Sparta, in essence, was probably a zero-sum game; iii) the period of 431–379 characterized by rivalries between the Greek city-states; iv) the Second Athenian Alliance (378–355) and the decline of both Athens, due to the Social War, and Sparta, due to its defeat by Thebes in 371 and 362 at Leuctra and Mantineia, respectively; and finally, v) the economic recovery of Athens and the rapid rise of King Phillip II of Macedonia as the most powerful economic and military Greek state of the times, culminating in Athens’ defeat at the naval battles of Echinadai in 323 BCE and Amorgos in the following year. Table 3.2 functions “abstractly,” as it presents the ceilings of naval forces of the two competitors at specific periods during times of prenaval conflicts or specific important events for which sufficient and reliable statistical data are available. The analysis of Spartan naval power only makes sense if it is seen in conjunction with the other naval forces of the Peloponnese, as Sparta alone did not have the necessary naval potential to compete with Athens and relied on assistance from its allies and/or satellite states, for example, Corinth (which had a noteworthy navy), Megara, Sicyon, Ambrakia, Elis and the city-states of Argolis (except Argos itself). Additionally, Sparta probably also relied on Persian financing, the so-called Persian or golden darics and the Persian silver sigloi and bullion during the Peloponnesian War. However, the wages of Peloponnesian military personnel were paid in Greek coins, mainly Attic money. Table 3.2 also contains numbers regarding quadrireme and quinquereme types of warships. Quadriremes (Greek: tetreres) were an evolution of the trireme. They

Adopting a “Turn to the Sea” Strategy  77 Table 3.2 Comparison of Athenian and Peloponnesian naval forces Year

480 469 460

The Ceiling of Naval Forces (triremes, The Ceiling of Naval Forces etc.) of the Delian League (triremes, etc.) of the Peloponnesian League

200 from Athens 200: naval battle of Eurymedon 250: during a failed campaign in Egypt; 200 after the campaign 431 300: inauguration of the Peloponnesian War 421 300: peace of Nicias 413 108: after the destruction due to the Sicilian Campaign 406 180: during the naval battle of Arginusae 405 180: destruction at Aigospotamoi 404 12: The Spartans as victors of the Peloponnesian War forbid the Athenians to build new triremes 387 50–70: The re-armament of Athens starts in 395 BCE 378 103 Circa 357/6 283: In all probability, this number declined due to losses because of the Social War of 357–355 353/2 349 330/328 392 triremes plus eight quadriremes; shipbuilding continues to climb 323/2 417: Shipbuilding reaches its recorded ceiling peak (360 triremes, 50 quadriremes and seven quinqueremes) 321 200–250: Due to lack of crew, ships remain at the three ports of Piraeus

120–130: Sparta provided 16 Approximately 100 Approximately 100 – Approximately 120–150 Approximately 120–150 170 180 180 – – 10–1522 – – 10 (a hypothesis)

10 (a hypothesis)

Sources: Andreades (1933, 324), French (1964), Morrison et al. (2000), Gabrielsen (2014), Strauss (2014), O’ Halloran (2018).

were larger ships with four levels of oars, each rowed by two oarsmen. They were most developed in the latter half of the fourth century BCE. Their first recorded appearance was at the siege of Tyre by Alexander the Great in 332 BCE. A few years later, Athens adopted this new type of warship as well, in limited numbers. Yet another evolution was the quinquereme (Greek: penteres). During most of the fourth century, the quinquereme (five levels of oars) was the heaviest type of warship and was often used as the flagship of fleets composed of triremes and quadriremes. The Phoenician Sidon had such kind of ships by 351, and Athens fielded some in 324. It is worth noting that, during the Naval Battle of Cape Ecnomus in 256 during the First Punic War (264–241 BCE) between the fleets of Carthage and

78  Adopting a “Turn to the Sea” Strategy the Roman Republic, both powers used the quinquereme as their main military vessel. It should be noted, however, that the statistical data in Table 3.2 refer to the fleet’s maximum ceilings. In practice, probably a part of the Athenian fleet always remained in port, without ever going out or manning real action, acting more as a psychological deterrent to the enemy. The rationale for such a strategy is that a fleet staying inside a friendly naval base is not in danger of being crushed by the enemy in an open naval battle, remaining an intact military force that can be deployed in the future. In any event, if Athens in 323/322 BCE, before the naval battles of Echinadai in 323 and Amorgos in 322, had 360 battle-ready triremes, for the fleet to be manned, it would have required 72,000 (360 x 200) personnel for the triremes alone, reaching a total of over 85,000, including the quadriremes and some quinqueremes. This is a number that would have been simply impossible to achieve, based on the available historical data, even if a large part of the metic and/or slave population, theoretically, could have been conscripted as well. On this, McArthur (2021, 482) writes that, for much of the fourth century, Athenian shipwrights were producing more ships than the city could fully man or equip.23 Thus, we can guess that the ceiling of 417 warships in total in Table 3.2 was probably in a fleet in being condition – that is, warships capable to be used only “when in need.” Such a military strategy provides the defender with the following advantage: the immediate replacement of ships lost during operations.24 Acton (2014, 197) argues that, during the 446–431 period, before the Peloponnesian War, Athens intensified the production of triremes, building 15 on an annual basis. Andreades (1933, 322), 80 years later, argues that that number was reduced to ten. Diodorus Siculus (11.43.3), French (1964) and O’Halloran (2018) argue that during that period, the Athenian state could build up to 20 triremes a year. Figueira (2022) provides a synthesis of the above views, as he estimates that during the Periclean period Attic shipyards built new ships (probably 10–20 vessels annually), while, simultaneously, drying out, refurbishing and re-equipping existing triremes under the supervision of Athenian trierarchs. In any case, the “fleet in being” view may mean that the Athenians always wanted to keep their shipyards’ production lines open, securing the long-term survival of their shipping “industry.”25 The intensification of the Athenian production of warships during the 482–322 period is proof that some kind of total factor productivity (under a modern interpretation) must have been achieved by the Athenian shipping “industry,” at least for some subperiods, e.g., the period between 338–322. This can be described through the following Cobb-Douglas form:

Y = A × Kα × Lβ

(3.3)

where:

• Y = total production (the real value of all goods produced in a year). • L = labor input (working hours in a year). • K = capital input (a measure of all machinery, equipment and buildings; the value of capital input divided by the price of capital).

Adopting a “Turn to the Sea” Strategy  79

• A = total factor productivity. • α and β = the output elasticities of capital and labor, respectively. These values are constants determined by the available technology.

In the Athenian case, more or less, it applies:

α + β > 1

(3.4)

which modern economic theory characterizes as increasing returns to scale. This means that a percentage increase in K and L would produce a larger percentage increase in trireme Y output. Based on the data in Table 3.2, Figure 3.4 presents the correlation of naval forces between Athens, its allies and the Peloponnesian League. Data are processed through Microsoft Office Excel 2010 for the 480–322 BCE period. The horizontal axis shows the total time for the period 480–322 BCE., i.e., 158 years. The vertical axis shows the size of naval forces between Athens, its allies and the Peloponnesian League. These cliometric data represent ceilings of naval power as cited by ancient sources and their modern interpretations for specific periods. In practice, smaller fleets were actually involved. Therefore, these naval ceilings are cited to demonstrate the naval power potential between the two coalitions (Athens vs Peloponnesian League). But in practice, when the two leagues were engaged in an open naval confrontation with each other, they deployed smaller numbers of naval forces. In the data of Table 3.2, it is also assumed that between 478 and 431 BCE, the Athenian fleet continued to grow in size. Strauss (2014, 72), based on Plutarch (Per., 11.4), argues that, in the time of Pericles, in practice, the state, using thetes and metics, could man about 60 triremes annually. They were paid for an eightmonth term. It should be noted, however, that additional possible losses due to low-intensity engagements of the Athenian navy with the Persians in the Aegean cannot be excluded with any certainty for the same period. Table 3.2 assumes that the naval forces of the Peloponnesian League would probably have been reduced to about 100 warships between 479–431 BCE. In contrast, Strauss argues that, before

Ceiling of ships

Athenian naval supremacy 480-322 BCE 500 400 300 200 100 0

125 100 100 140 140 140 170 180 180

-

13

13

10

10

200 200 250 300 300 108 180 180 12 60 283 390 417 220 Years: From 480 to 322 BCE

Figure 3.4  Athenian naval supremacy on a statistical scale.

80  Adopting a “Turn to the Sea” Strategy 413, the Peloponnesians could not man more than 50 ships per year (Strauss 2014, 72). The Peloponnesian League achieved a ceiling of 150 triremes in 431, just before the Peloponnesian War. Thus, according to Figure 3.4, one can observe that, initially, Athens presents an impressive rise in the size of its naval forces (480–421 BCE), followed by a gradual decline due to losses (420–404) during the Peloponnesian War. Then followed a gradual recovery, culminating in the peaceful period 325/323 and the redistributive/fiscal expansionary programs of Eubulus and Lycurgus, as will be discussed in 9.2.1. The extroverted Athenian economy, which was receptive to trade and innovative economic institutions, considered naval power as the main principle of a grand strategy, which made a necessary prerequisite: the reconstruction of the Athenian fleet after major losses and strategic defeats such as in the Sicilian Campaign and the Aigospotamoi (Goats Rivers). Figure 3.4 fully justifies Thucydides’s (1.143.5) claim regarding the Athenian military doctrine: “The rule of the sea is indeed a great matter.” The Athenians, like many great maritime powers in later times, such as Macedon, Carthage, Rome, the Byzantine Empire, Venice, the United Provinces, Great Britain and the United States during the Cold War and today, etc., understood that the essence of their supremacy lays in their superior navy and their sea power. Both Aristotle and Thucydides believed that democracy was inextricably linked to sea strategy and naval power. For their relative views, one can read Ober (1978) and Starr (1978), respectively. Thus, if we exclude the Minoans from Crete during the Bronze Age period and the Phoenicians during the Archaic times, Themistocles, Cimon and Pericles were probably the first in world history to implement a specific strategy based on naval power. In accordance with the above, eminent historian and international relations theorist E.H. Carr, following the line of Thucydides, Machiavelli and Hobbes, in 1939, wrote his seminal contribution, The Twenty Years’ Crisis: 1919–1939 shortly before the outbreak of World War II in Europe. There, among others, he defined the reasons behind the British supremacy globally in the nineteenth century: i) dominance of the British fleet in the global seas, ii) strong dominance of the British economy and the stock market in the international capital markets, iii) the British pound becoming the universal currency, iv) the British trading without barriers internationally and v) achieving the global introduction of the English language. I argue that, these five prerequisites were, in principle, also met by Athens and its “empire” during the Periclean golden age period, to a greater or lesser extent, even if it must be taken into account that, in the first case, we are talking about a modern/ capitalist economy, while in the second case, we are referring on an ancient/premodern economy, with all the limitations that such a comparison includes. Notes 1 The logic behind these ancient privateering operations was probably similar to that of the English and Dutch corsairs of the sixteenth century against the fleets of Spain and Portugal during the early modern period in Europe (Kyriazis et al. 2018; Economou and Kyriazis 2019, ch. 8).

Adopting a “Turn to the Sea” Strategy  81 2 Acton (2014, 193–200) describes, in detail, the components of the trireme warships. For some objections regarding the exact number of crew, see Gabrielsen (1994, 110–114), Loomis (1998, 266–269) and Jordan (2000). 3 It is perhaps worth mentioning that the habit of assigning female status to warships has been preserved throughout history and is another valuable element that has its origin in Ancient Greece. For example, British naval tradition relates to the idea of a female figure such as a mother or goddess guiding and protecting a ship and crew. Just like what the ancient Greeks believed! 4 The first invasion took place in 490 BCE and led to the defeat of the Persians at the famous Battle of Marathon by the Athenians (mainly) and the Plataeans. For the importance of this battle to world history, the famous English philosopher and political economist John Stuart Mill, in an 1846 review of G. Grote’s History of Greece, wrote, that: The Battle of Marathon, even as an event in British history, is more important than the Battle of Hastings. 5 For the whole political background of the events before and after the second Persian invasion, see Strauss (2004), among others. For the critical role and the highly sophisticated strategic moves that Themistocles applied for the Greeks to achieve the monumental victory over the Persians through their mighty fleet at Salamis, see in detail, again, Strauss (2004), Figueira (2022), Economou et al. (2022) and Platias and Trigkas (2022), among others. 6 Herodotus, here, refers to the silver mines at Laurion. It must be noted that the Athenians also profitably exploited the marble quarries in Mt. Pentelikon and Hymettus. The famous marble that built the Parthenon on the Acropolis came from Mt. Pentelicon. 7 For public choice theory in general see, among others, the seminal works of Buchanan and Tullock (1962) and Arrow ([1951], 1963). Other important relative contributions are those of Downs (1957) and Olson (1965) regarding the study of special interests between groups and people. 8 See Herodotus (7.144), Aristotle (Ath. Const., 22.7), Thorley (1996, 58–55), Kyriazis and Zouboulakis (2004), Ηalkos and Kyriazis (2010), Kyriazis (2012, 61), Τridimas (2013, 435–456) and Economou and Kyriazis (2019), among others on this. 9 Clientelism refers to the exchange of goods and services for political support, often involving implicit or explicit quid pro quo procedures. 10 States in other Greek areas chose not to confront the Persian Empire and preferred to become satellite states of the later, such as the Kingdom of Macedon under Alexander I. Undeniably, the size and power of the Persian Empire would cause terror and greatly reduce the will of a state to resist on it. At that time, the Persian Empire had subdued approximately 40% of the world population while, territorially, it extended from India and Central Asia to Thrace, Egypt and Libya. Herodotus (7. 61–97) mentions 61 nations who took part in the second Persian invasion against Greece. He mentions that the Persian forces consisted of 2,641,610 warriors and approximately the same number of auxiliary staff. Regarding the fleet, he claims that the Persian warships amounted to 1,207 while the support ships were estimated to around 3,000. These numbers are excessive and have not been accepted by contemporary historians. Still, they reveal the terror the Persian forces had inflicted in their path. 11 A failed attempt to halt the Persian advance in southern Greece took place during the Battle of Thermopylae (August 480 BCE), which led to the heroic sacrifice of 300 Spartans (and their king Leonidas) and 700 Thespians. After the crucial victory of the Greeks at Salamis, the Greek victory was completed with the Battle of Plataea (August 479) under Spartan leadership (Cartledge 2013). 12 In organizational analysis, logrolling of interests refers to a practice in which different organizations promote each other's agendas, each in the expectation that the other will reciprocate. 13 There are no cliometric data available for the Classical Athenian economy, but by combining in this and the following sections, all the available evidence this claim seems reasonable. This particular issue is further discussed in Section 9.1.

82  Adopting a “Turn to the Sea” Strategy 14 Some writers wonder how the Athenians managed to build 200 triremes in just two years, implying that part of the fleet may have been built in other yards outside Attica. This is categorically rejected by McArthur (2021, 480), who argues that the 200 triremes were constructed domestically, and the architektones and the naupegoi who built them were either residents of Attica or were likewise based in Attica. 15 In his famous book The General Theory of Employment, Interest and Money, J.M. Keynes (1936) advocated for increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the depression caused by the 1929 crash in the United States. 16 What, in a modern economy, is known as the annual GDP. 17 This argument is probably valid and applies also to later vast shipbuilding programs such as that of Queen Elizabeth of England in the latter half of the sixteenth century. 18 For liturgies, see Section 8.9.2. 19 Except trierarchy, throughout the book, I also refer on various institutions of 3Ps, such as land leases by the state to the private sector to exploit the Athenian silver mines, the introduction of telonai, with tax-farming duties and the introduction of street sweepers. 20 It must also be clarified that, to this point during the Classical period, the wealthiest citizens were not shipowners or merchants but still the landowners and those involved in mining. This gradually changed during the Hellenistic period onward in which, according to Migeotte (2009, 142), more and more citizens are to be found among the merchants, entrepreneurs, shipowners and bankers in large trading cities such as Alexandria, Byzantium, Nicomedia and Ephesus. 21 For the current international system, such a situation is vividly described by Mearsheimer (2001) in his The Tragedy of Great Power Politics. 22 An estimation, due to lack of data: after defeats by Thebes in 371, 362 and the Social War, Spartan naval expenditures were cut back sharply. 23 Characteristically, in 357/356, a planned naval expedition was jeopardized due to a shortage of gear not hulls (Gabrielsen 1994, 105–110, 146–149). 24 The term fleet in being was first used in 1690 by Admiral Lord Arthur Herbert Torrington (1648–1716), commander of the English naval forces, who took an active part as a commander during the Nine-Year War (1688–1697) between a coalition of the Austrian– Hungarian Empire, the Holy Roman Empire, the United Provinces and England on the one side, and against King Louis XIV of France on the other. Such a historical phenomenon is a bit rare. Such a tactic proved ineffective after the destruction of the Italian fleet at the Battles of Taranto (November 11–12, 1940) and the American fleet at Pearl Harbor (December 7, 1941) after which it became too risky for a whole fleet to be concentrated in a port due to the fear of a surprise enemy attack by air. 25 Such a policy, to provide benefits in favour of a nation’s shipping industry, has an intetemporal character. In a very characteristic recent case, one can notice how furious the French government was after the cancellation of the 90-billion dollar deal regarding the procurement of submarines by the Australian Navy from France due to the socalled AUKUS agreement between Australia, the United States and the UK signed on September 15, 2021. There is no doubt that if that deal had materialized, the French military industry would have gained significantly in the long run.

Ancient Greek authors (Perseus Digital Library) Aeschines, Against Ctesiphon Aristotle, Athenian Constitution Demosthenes, Against Leptines Demosthenes, Against Meidias Demosthenes, Against Phaenippus

Adopting a “Turn to the Sea” Strategy  83 Demosthenes, Against Polycles Demosthenes, Olynthiac 1 Demosthenes, On the Navy Diodorus Siculus, Library Herodotus, The Histories Isocrates, Antidosis Lysias, Against Eratosthenes Lysias, On a Wound by Premeditation Plato, Phaedo Plutarch, Themistocles Thucydides, Histories (The Peloponnesian War) Xenophon, Hellenika Xenophon, Oeconomicus

Modern authors Acton, P. H., (2014), Poiesis: Manufacturing in Classical Athens, Oxford: Oxford University Press. Acton, P. H., (2016), ‘Industry structure and income opportunities for households in Classical Athens’, in E. M. Harris, D. M. Lewis, M. Woolmer (Eds.), The Ancient Greek Economy: Markets, Households and City States, New York: Cambridge University Press, 41–65. Akrigg, B., (2019), Population and Economy in Classical Athens, Cambridge: Cambridge University Press. Amemiya, T., (2007), Economy and Economics in Ancient Greece, London, New York: Routledge. Αndreades, A. M., (1933), A History of Greek Public Finance, Cambridge, MA: Harvard University Press. Arrow, K., ([1951], 1963), Social Choice and Individual Values, New Heaven: Yale University Press. Arrow, K., (1962), ‘The economic implications of learning by doing,’ Review of Economic Studies, 29, 155–173. Besley, T., Ghatak, M., (2017), ‘Public-private partnerships for the provision of Public Goods: Theory and an application to NGOs,’ Research in Economics, 71(2), 356–371. Bresson, A., (2016), The Making of the Ancient Greek Economy: Institutions, Markets, and Growth in the City-States, Princeton, NJ: Princeton University Press. Buchanan, J. M., Tullock, G., (1962), The Calculus of Consent: Logical Foundations of Constitutional Democracy, Ann Arbor, MI: University of Michigan Press. Canevaro, M., (2018), ‘What was the law of Leptines’ really about? Reflections on Athenian public economy and legislation in the fourth century BCE,’ Constitutional Political Economy, 29, 440–464. Carmichael, C. M., (1997), ‘Public munificence for private benefit. Liturgies in Classical Athens,’ Economic Inquiry, 35(2), 261–270. Carr, E. H., ([1939], 1981), The Twenty Years’ Crisis: 1919–1939: An Introduction to the Study of International Relations, London and Basingstoke: The MacMillan Press Ltd. Cartledge, P., (2013), After Thermopylae: The Oath of Plataea and the End of the GraecoPersian Wars, Oxford: Oxford University Press.

84  Adopting a “Turn to the Sea” Strategy Casson, L., (1971), Ships and Seamanship in the Ancient World, Princeton: Princeton, University Press. Christ, R. M., (2006), The Bad Citizen in Classical Athens, Cambridge: Cambridge University Press. Cohen, E. E., (1992), Athenian Economy and Society: A Banking Perspective, Princeton, NJ: Princeton University Press. Davies, J. K., (1981), Wealth and the Power of Wealth in Classical Athens, New York: Amo Press. Downs, A., (1957), An Economic Theory of Democracy, New York: Harper and Row. Economou, E. M. L., (2020), The Achaean Federation in Ancient Greece: History, Political and Economic Organisation, Warfare and Strategy, Cham: Springer. Economou, E. M. L., Kyriazis, N. C., (2014), ‘Property rights and democratic values in preClassical Greece,’ Social Science Tribute, ΙΣΤ(63), 46–59. Economou, E. Μ. L., Kyriazis, N. C., (2017), ‘The emergence and the evolution of property rights in ancient Greece,’ Journal of Institutional Economics, 13(1), 53–77. Economou, E. M. L., Κyriazis, N. C., (2019), Democracy and Economy: An Inseparable Relationship Since Ancient Times to Today, Newcastle upon Tyne: Cambridge Scholars Publishing. Economou, E. M. L., Kyriazis, N. C., Platias, A., (2022), ‘Introduction,’ in E. M. L. Economou, N. C. Kyriazis, A. Platias (Eds.), Democracy and Salamis. 2500 Years After the Battle that Saved Greece And the Western World, Cham: Springer Verlag. Figueira, T. J., (2011), ‘The Athenian naukraroi and archaic naval warfare,’ Cadmo, 21, 183–210. Figueira, T. J., (2022), ‘Salamis as inflection point: Militarization, politicization, and democratization,‘ in E. M. L. Economou, N. C. Kyriazis, A. Platias (Eds.), Democracy and Salamis. 2500 Years After the Battle that Saved Greece And the Western World, Cham: Springer Verlag, 75–98. Figueira, T. J., Jensen, S. R., (2019), Hegemonic Finances. Funding Athenian Domination in the 5th Centuries BC, London: Bloomsbury. French, A., (1964), The Growth of the Athenian Economy, London: Routledge and Kegan Paul. Gabrielsen, V., (1994), Financing the Athenian Fleet: Public Taxation and Social Relations, Baltimore: John Hopkins University Press. Gabrielsen, V., (2013), ‘Finance and taxes,’ in H. Beck (Ed.), A Companion to Ancient Greek Government, Malden, MA: Willey-Blackwell, 332–348. Gabrielsen, V., (2014), ‘The Piraeus and the Athenian navy: Recent archaeological and historical advances,’ Proceedings of the Danish Institute at Athens. Retrieved from https://tidsskrift​.dk​/pdia​/article​/view​/24130 Gilpin, P., (1981), War and Change in World Politics, Cambridge: Cambridge University Press. Gilpin, R., (1988), ‘The theory of Hegemonic war,’ Journal of Interdisciplinary History, 18(4), 591–613. Günther, J., Hahn, F., (2019), ‘Choregia and trierarchy as profit-oriented entrepreneurships,’ Constitutional Political Economy, 30, 177–193. Halkos, G., Kyriazis, N. C., (2010), ‘The Athenian economy in the Age of Demosthenes,’ European Journal of Law and Economics, 29, 255–277. Halkos, G., Economou, E. M. L., Kyriazis, N. C., (2022), ‘Tracing the optimal level of political and social change under risks and uncertainties: Some lessons from Ancient

Adopting a “Turn to the Sea” Strategy  85 Sparta and Athens,’ Journal of Risk and Financial Management, 15, 416. https://doi​.org​ /10​.3390​/jrfm15090416 Hansen, M. H., (1991), The Athenian Democracy in the Age of Demosthenes, London: Bristol Classical Press. Jordan, B., (2000), ‘The crews of Athenian triremes,’ L’ Antiquité Classique, 69, 81–101. Kaiser, B. A., (2007), ‘The Athenian trierarchy: Mechanism design for the private provision of public goods,’ The Journal of Economic History, 67(2), 445–475. Kallet-Marx, L., (1993), Money, Expense and Naval Power in Thucydides’ History 1-5.24, Berkeley: University of California Press. Kallet, L., (2007), ‘The Athenian economy,’ in L. J. Samons II (Ed.), The Cambridge Companion to the Age of Pericles, Cambridge: Cambridge University Press, 70–95. Kennedy, P., (1987), The Rise and the Fall of Great Powers, New York: Random House. Keynes, J. M., (1919), The Economic Consequences of the Peace, London: Macmillan & Co., Limited. Keynes, J. M., (1936), The General Theory of Employment, Interest and Money, London: Macmillan & Co. Knorr, K., (1956), The War Potential of Nations, Princeton, NJ: Princeton University Press. Kollias, C., (2017), Defence Economics, Athens: Tourikis (in Greek). Krueger, A. Ο., (1974), ‘The political economy of the rent-seeking society,’ American Economic Review, 64, 291–303. Krugman, P. R., Obstfeld, M., Melitz, M., (2018), International Economics: Theory and Policy, 11th ed., New York: Pearson. Kyriazis, N. C., (2009), ‘Financing the Athenian state: Public choice in the age of Demosthenes,’ European Journal of Law and Economics, 27(2), 109–127. Kyriazis, N. C., (2012), Why Ancient Greece, Athens: Psychogios Publications. Kyriazis, N. C., Economou, E. M. L., (2019),‘The ancient Athenian economy: A review,’ in J. G. Dellis, S. A. Paipetis (Eds.), The Influence of Hellenic Philosophy on the Contemporary World, Newcastle upon Tyne: Cambridge Scholars Publishing, 56–67. Kyriazis, N. C., Metaxas, T., Economou, E. M. L., (2018), ‘War for profit: English corsairs, institutions and decentralized strategy,’ Defence and Peace Economics, 29(3), 335–351. Kyriazis, N. C., Economou, E. M. L., (2015), ‘Macroculture, sports and democracy in Classical Greece,’ European Journal of Law and Economics, 40, 431–455. Kyriazis, N. C., Economou, E. M. L., (2019), ‘The ancient Athenian economy: A review,’ in J. G. Dellis, S. A. Paipetis (Eds.), The Influence of Hellenic Philosophy on the Contemporary World, Newcastle upon Tyne: Cambridge Scholars Publishing, 56–67. Kyriazis, N. C., Zouboulakis, M., (2004), ‘Democracy, sea power and institutional change: An economic analysis of the Athenian naval law,’ European Journal of Law and Economics, 17, 117–132. Loomis, W. T., (1998), Wages, Welfare Costs and Inflation in Classical Athens, Michigan: Michigan University Press. Lyttkens, C. H., (1994), ‘A predatory democracy: An essay on taxation in classical Athens,’ Explorations in Economic History, 31, 62–90. Lyttkens, C. H., (1997), ‘A rational-actor perspective on the origin of liturgies in ancient Greece,’ Journal of Institutional and Theoretical Economics, 153, 462–484. Lyttkens, C. H., (2013), Economic Analysis of Institutional Change in Ancient Greece. Politics, Taxation and Rational Behaviour, London, New York: Routledge.

86  Adopting a “Turn to the Sea” Strategy Lyttkens, C. H., Gerding, H., (2022), ‘Coping with chronic warfare. The Athenian experience,‘ in E. M. L. Economou, N. C. Kyriazis, A. Platias (Eds.), Democracy and Salamis. 2500 Years After the Battle that Saved Greece And the Western World, Cham: Springer Verlag, 181–200. Mackinder, H. J., (1904), ‘The geographical pivot of history,’ The Geographical Journal, 23(4), 421–437. Mahan, A. T., ([1890], 1980), The Influence of Sea Power Upon History, 1660–1783, New York: Dover Publications. Mansfield, D. E., (1994), Power, Trade and War, Princeton: Princeton University Press. McArthur, M., (2021), ‘Athenian shipbuilders,’ Hesperia, 90(3), 479–532. Mearsheimer, J. J., (2001), The Tragedy of Great Power Politics, New York: W.W. Norton & Company. Migeotte, L., (2009), The Economy of the Greek Cities. From the Archaic Period to the Early Roman Empire, Berkeley, Los Angeles, London: University of California Press. Mitchell, H., ([1940], 2014), The Economics of Ancient Greece, Cambridge: Cambridge University Press. Morrison, J. S., Coates, J. F., Rankov, N. B., (2000), The Athenian Trireme: The History and Reconstruction of an Ancient Greek Warship, Cambridge: Cambridge University Press. North, D. C., Thomas, R. P., (1973), The Rise of the Western World: A New Economic History, Cambridge: Cambridge University Press. Ober, J., (1978), ‘Views of sea power in the fourth-century attic orators,’ The Ancient World, 1(3), 119–130. Ober, J., (2008), Democracy and Knowledge. Innovation and Learning in Classical Athens, Princeton: Princeton University Press. Olson, M., (1965), The Logic of Collective Action: Public Goods and the Theory of Groups, Harvard: Harvard University Press. O’ Halloran, B., (2018), The Political Economy of Classical Athens: A Naval Perspective, Leiden: Brill. Platias, A., Trigkas, A., (2022), ‘Themistocles: Leadership and grand strategy?,’ in E. M. L. Economou, N. C. Kyriazis, A. Platias (Eds.), Democracy and Salamis: 2500 Years After the Battle that Saved Greece And the Western World, Cham: Springer Verlag, 99–130. Pigou, A. C., (1916), The Economy and Finance of the War. Being a Discussion of the Real Costs of the War and the Way in Which They Should be Met, London, Paris, Toronto: J.M. Dent & Sons Limited. Polachek, S. W., (1994), ‘Peace economics: A trade theory perspective,’ Peace Economics, Peace Science and Public Policy, 1(2), 12–15. Schumpeter, J. A., (1928), ‘The instability of capitalism,’ Economic Journal, 8(151), 361–386. Schumpeter, J. A., ([1954], 2006), History of Economic Analysis, London: Routledge. Serrati, J., (2013), ‘Government and warfare,’ in H. Beck (Ed.), A Companion to Ancient Greek Government, Malden, MA: Willey-Blackwell, 332–348. Starr, C. G., (1978), ‘Thucydides on sea power,’ Mnemosyne, Fourth Series, 31(4), 343–350. Strauss, B. S., (2000), ‘Perspectives on the death of fifth-century Athenian seamen,’ in H. van Wees (Ed.), War and Violence in Ancient Greece, London, Swansea: The Classical Press of Wales, 261–284. Strauss, B. S., (2004), The Battle of Salamis: The Naval Encounter that Saved Greece-and Western Civilization, New York: Simon and Schuster.

Adopting a “Turn to the Sea” Strategy  87 Strauss, B. S., (2014), Athens After the Peloponnesian War. Class Faction and Policy 403386, London, New York: Routledge. Thorley, J., (1996), Athenian Democracy, London, New York: Routledge. Tridimas, G., (2013), ‘Homo Oeconomicus in ancient Athens: Silver bonanza and the choice to build a navy,’ Homo Oeconomicus, 30(4), 435–458. Tullock, G., (1989), The Economics of Special Privilege and Rent Seeking, Boston: Kluwer Academic Publishers. Van Wees, H., (2013), Ships and Silver, Taxes and Tribute. A Fiscal History of Archaic Athens, London, New York: I.B. Tauris.

4

The Protection of Private Property and the Rule of Law

4.1 The Importance of Property Rights Protection for Achieving a Prosperous Economy Classical economists, starting from A. Smith, placed a lot of importance on property rights underpinning a market economy. More recent prominent philosophers provide further argumentation on the issue. Hodgson (2015, 1) points out a key feature of property: that it is inherent in human history. Sentiments of ownership are deeply ingrained in the human conscience. Property rights are a mainstay among institutions for promoting growth. Several scholars, mostly representatives of the New Institutional School of Economics, such as Nobel laureates Ronald Coase, Douglass North, Oliver Williamson and Elinor Ostrom, have argued that a well-defined regime for the protection of property, either private or public, are very important prerequisites for economic development (Coase 1937, 1960; North and Thomas 1973; North 1978, 1981, 1990; North and Weingast 1989; Williamson 1975, 1990; Ostrom 1990).1 North and Weingast (1989) analyzed the issue of the protection of private property as a credible commitment on the part of the state, emphasizing the importance of a government adhering to its commitments in protecting property rights. If a political regime does not ensure the protection of property rights, then consumption is favored over savings, which, in the long run, leads to lower macroeconomic performance (Economou and Kyriazis 2019a). By contrast, the states which protect property rights achieve higher growth than those that do not (Knack and Keefer 1995; Acemoglu and Robinson 2013). Lyttkens (2013, 4) adds that, in the absence of a legal system secured by law, non-protection of private property reduces longterm investments and increases transaction costs. Of course, the discussion on property rights is also related to the issue of individual or collective ownership. Aristotle argued that communal ownership is not effective when work effort is related to the acquisition of goods privately. Furthermore, is problematic because, under such a regime, the degree of productive effort of the individual is not linked to his reward. He wrote: Property that is common to the greatest number of owners receives the least attention; men care most for their private possessions, and for what they own in common less. (Pol., 2.1261a) DOI:  10.4324/9781003434146-4

The Protection of Private Property and the Rule of Law  89 He adds that: Now if the tillers of the soil be of a different class2 there might be another and easier system, but if the citizens do the work for themselves, the regulations for the common ownership of property would give more causes for discontent; for if both in the enjoyment of the produce and in the work of production they prove not equal but unequal, complaints are bound to arise between those who enjoy or take much but work little and those who take less but work more (emphasis in bold by the author). And in general to live together and share all our human affairs is difficult, and especially to share such things as these.….Community of property therefore involves these and other similar difficulties; and the present system, if further improved by good morals and by the regulation of correct legislation, would be greatly superior….. It is clear therefore that it is better for possessions to be privately owned, but to make them common property in use; and to train the citizens to this is the special task of the legislator. (Pol., 2.1263a) Here, Aristotle proves that he also understood another modern axiom: that individual ownership increases the motivation for greater productive effort, either at the level of the oikos (the household) or the level of the city-state economy as a whole. This axiom had already been identified by Aristotle and in other passages (Arist., Pol., 1261b.35–40, 1263a.30–35; Arist., Oec., 1344b.37–1345a.2). In Nicomachean Ethics (1168a.25-30) he writes that: Again, everybody loves a thing more if it has cost him trouble: for instance those who have made money love money more than those who have inherited it. Now to receive a benefit seems to involve no labor, but to confer one is an effort. Modern literature conveys that individual ownership, either of material or financial kind, increases the responsibility and the productivity of a person (Barzel 1997). Aristotle further perceived private property as a “natural relation of man to goods.” Thus, Aristotle reversed Plato’s position in his Republic (5.462b) in which the latter argued that communal ownership was necessary to achieve the common interest and to avoid “social division” that occurs when some privileged people benefit greatly, while the rest do not benefit equally. It is, perhaps, not an exaggeration to claim that Plato, and later, Aristotle, understood from antiquity some of the basic principles of what now is known as the politico-economic theories of socialism/communism and capitalism/liberalism, respectively, at least regarding ownership. What is also true is that these particular views of Aristotle strongly affected also the Roman law. Property and wealth were protected by law in Classical Athens. According to Aristophanes (Wealth 531–533) profit was related to wealth. In general, the Athenians supported individual property, as it strengthened social cohesion and

90  The Protection of Private Property and the Rule of Law harmony among them (Lysias, On the Confiscation of the Property of the Brother of Nicias, 18.17; Xenophon, Oec., 17; Isocrates, Panegyricus, 103; Aristotle, Pol., 1261b.35–40, 1263a.30–35, 1297b.15–30; Plutarch, Sol., 21.2). Individual property was in direct relationship with the principle of eunomia (good order – governance according to good laws). Good laws and obedience to them were the two safeguards for the efficient polis organization and administration (Arist., Pol., 4.1294; Thuc., 2.37.1; Demosthenes, Against Aristogiton I, 25.26–27). This is another intertemporal axiom that also applies to modern economies (Acemoglu and Robinson 2013; Hodgson 2015). The brief analysis of the basic theory concerning property rights is also related to the recently revived academic debate regarding the nature of property rights. According to this discussion, property rights are approached in two different ways: the first sees the possession of goods and services by individuals within the context of legal ownership, i.e., that a good or service belongs to its owner after its acquisition by legal means, as officially recognized by the state authority (e.g., buying a product from a market). The second concerns the possibility to enjoy a part of property in any way (legal or not). In the first case, property rights are, by definition, linked to the legal ownership by their beneficiary upon acquisition. In the second case, the right of ownership is based on the mere possession of a good, even if this is the result of an illegal act (e.g., theft).3 In the first case, this is related to the socalled legitimate rights, while, in the second, to economic or possession rights. In Economou and Kyriazis (2017, 2019a,b), proof is offered that the status of property rights in Ancient Greece can be better understood as falling under the first case. 4.2 Property and Commercial Contracts Protection in the Athenian Daily Practice This section provides evidence regarding specific speeches of orators or philosophers which denote that property rights were protected in practice and according to the laws of the Athenian state. There is a plethora of such cases (Cohen 1973, 1992). Confiscation of property took place very rarely and only when there were very serious reasons: criminal acts that had been certified by a court decision, such as high-treason, misuse of public money, bribery, etc. (Lysias, On the Property of Aristophanes, 8; Defense Against a Charge of Taking Bribes, 21.11–16). Even in the case of dismissal from the status of citizen due to atimia or ostracism, the property of the punished was not confiscated before a decision by a court. Further characteristic forensic speeches of Lysias which contain this dimension of an organized and effective institutional framework for the protection of private property are, among others, the speech On the Property of The Brother of Nicias: Peroration of 396 BCE concerning whether the state should seize the property of a rich man, Nicias; the speech On the Property of Aristophanes of 388/387, concerning the confiscation (or not) of Aristophanes’s estate; and the speech On the Refusal of a Pension, probably of 403 BCE, in which Lysias defends a physically disabled man accused of cheating the state authorities to receive disability compensation. It is worth noting that this particular speech, highlights the role of the

The Protection of Private Property and the Rule of Law  91 welfare state of Athens: a person with a physical disability received money from the state to improve his life.4 The other great orator, Demosthenes, in his 353 BCE speech Against Timocrates in the Assembly, stigmatizes the enactment of a law proposed by Timocrates which provided special privileges and scandalous favor on wealthy debtors because, according to the proposed law, any debtor of the state should remain at liberty until the ninth annual prytany, on the condition that they provided a surety, rather than being imprisoned until they paid their debts. Demosthenes’s speech criticized that proposed law on the grounds that it would unfairly advantage wealthy citizens at the expense of the poor. The protection of capital and commercial activity from abusive behavior is also highlighted in Demosthenes’s speech For Phormio. There were also cases of lawsuits involving financial damage to the production of farm products due to, what is today characterized as a negative externality,5 the construction of a wall that damaged the plaintiff’s production by flooding rainwater. In this case, the law provided for compensation for the victim and a fine in favor of the public (Demosthenes, Against Calicles, 55.9–14, 55.20–21, 55.25–26). Another interesting case involved the trial of an entrepreneur who, in an attempt to extract silver from a mine in Laurion, proceeded to excavate illegally on land leased by the state (through auction) to an individual for exploitation for a certain period (Hyperides, In Defence of Euxenippus, 35–36). It was the so-called board of poletai (board of sellers), known also as the poletai, that was responsible for such forms of land leases.6 Even the eponymous archon, the highest-ranking official of the state, when undertaking his duties, proclaimed that, until the end of his term, every citizen would continue to own the lands he had previously owned (Arist., Ath. Const., 56.2; Avil΄es and Mirhady 2013, 210). Furthermore, newly appointed judges, in their Heliastic oath (Isaeus, Cleonymus), before taking on their duties, included the phrase: I will not allow the withdrawal of private debts or the reclamation of land and houses belonging to an Athenian. In other words, the Athenians did not arbitrarily encroach on private property, except by court decision. This aspect of the Heliastic oath denotes that the protection of property (of every kind) was paramount in the mentality of the Athenians and was integrated into the provisions of the law. Thus, for the Athenians, protection of property was related to their freedoms and to democracy itself, if one interprets their behavior through Hayek’s (1981) spectacles. Encroachments on property rights were severely punished under the Athenian law (McDowell 1978, 208–210). Anyone convicted of theft, constituting a violation of property rights, was fined from two to ten times the value of the stolen object and was imprisoned for some time (Dem., Ag. Tim., 24.105, 24.115). The protection of private property was so important for the Athenian state that it gave the individual the right even to kill an intruder who illegally invaded his home if caught on the premises.

92  The Protection of Private Property and the Rule of Law In direct relationship to property rights protection is the issue of the protection of commercial contacts by law. Johnstone (2011, 40) argues that the Athenians, when trading, considered agreements through written contracts as very important, as they could be invoked in the courts. For both modern economic theory and law science, protection of commercial contracts has been identified as one of the most important institutional arrangements for making transactions reliable for all parties involved. In fact, on this subject, contract theory, Oliver Hart and Bengt Holmstrom received the Nobel Prize in Economics in 2016. On the other hand, in regimes in which officials have the power to repudiate contractual agreements, this can significantly impinge on economic activity and discourage foreign direct investment (FDI). In particular, entrepreneurs are likely to be suspicious about the institutional or other potential barriers, such as confiscatory taxation (directly or through inflation). Below, evidence is provided regarding two written contracts that are related to loans provided by the treasuries – temples of Athena and by the treasuries – temples of Delos, respectively.7 The first is related to inscription IG I3 (369), dated 425/424. It is about a loan provided for war finance purposes: The tamiai, [for whom] Phokiades from Oion was secretary, handed over, while Stratokles was Eponymous Archon, this money to the generals for the Peloponnese: to Demosthenes the son of Alkisthenes of Aphidna, when the tribe of Oineis presided in the fourth prytany, on the third day, from the Opisthodomos, 30 talents. Interest for these funds was 5,910 drachmae. The second, retrieved from inscription ID 1416B (col. II. 69-92), dated 156/155 BCE, is related to a loan offered by the treasury to an individual: During the time while Anthesterion was Eponymous Archon in Athens, during the month of Skirophorion, the officials appointed for the protection of the sacred monies and of the other revenues of the god, Diophantos son of Hecatios of Hermos, and Theodoros son of Straton of Marathon, loaned to Sarapion son of Ammonios of Pambotadai 3,500 drachmae of sacred money…on the month of Hekatombaion during the archonship of Kallistratos, with interest at ten percent upon security for the house nearby that was previously Poulydamas’…of which neighbored the house of Telemnestos son of…from the east, the public road from the north, the house of Diacritos son of from the west, the house of Telemnestos son of Antigonos from the south, with the result that the house lies pledged to the god as a sacred house till he repays the loan and the interest. This contract explains in detail that Sarapion took the loan upon security for a house he owned, for which an exclusive description is given regarding where it was located and with which other buildings owned by specific citizens it bordered. The logic behind this is the same with the modern practice of including cadastral maps regarding real estate contracts. Finally, what is also important to be taken into account is that Athenian law provided justice also in cases of jointly owned property. This covered not only

The Protection of Private Property and the Rule of Law  93 immovable property such as land but movables as well. Harrison (1968, 239–243) provides persuasive evidence on this. Another aspect of this is the transfer of property by joint owners to other joint owners. On this, Harrison retrieves the inscription IG XII. 5.872 in which, on the island of Tenos in the third century BCE, the land register made possible the partial ownership of a building or even part of a water supply. With near-certainty, one can assume that such a regulation also existed in Classical Athens which, after all, was the pioneer in such innovative economic institutions. 4.3  Dikai Emporikai Based on Xen. (W.M., 3.1–5), Canevaro (2018) argues that the commercial activity (exports and imports), which was beneficial for the Athenian polis, could flourish through proper legislation. Cohen (1973, 96–157, 1992, 125) refers to a series of commercial cases of maritime law known as dikai emporikai. According to Lanni (2006, 151), dikai emporikai, as a judicial process most likely emerged sometime between 355 and 347 BCE. Such trials are mentioned by Aristotle (Ath. Const., 59.5) and Demosthenes (Ag. Lac., 35.35). They featured a variety of distinctive aspects, including equal standing for either Athenian citizens or foreigners and metics, expedited procedures and special measures for enforcing judgments. Not only Athenians but also foreign traders and metics could defend their economic rights through dikai emporikai. Cagurati (2019, 131) argues that, perhaps, even slaves had the right to appeal to dikai emporikai. This possibility is no exaggeration: in the fourth century, the famous cases of Pasion and Phormion are very well known, being both slaves, who were involved in complex commercial activities running the banks of their masters.8 To pay for the purchase of goods, a merchant or shipowner borrowed funds to cover the duration of the journey, which was either direct (one way) – e.g., from Piraeus to the city-state of Amphipolis (Macedonia in Northern Greece) – or with return – e.g., from Piraeus to Amphipolis and then back to Piraeus. The loan, including the borrowing interest, was paid to the lender from the profits from the sale of the goods, provided, of course, that the goods were received in excellent condition by the buyer. The naval means of conducting trade were quite satisfactory. The transport of 3,000 medimnoi of grain was not a negligible endeavor, as one medimnos corresponded to 59 liters (i.e., approximate 59 kg–60 kg.); 3,000 medimnoi corresponded to 180 tons of goods. The tonnage of the ships during the Classical period had greatly increased relative to the cargo capacity during the Archaic period. Of course, there was always the risk of losing the goods for any of a number of reasons (piracy, bad weather, rough seas, shipwreck, etc.). For this reason, and because of the potential risk during the trip, lending rates by Athenian bankers were very high and were connected to the level of risk – another modern practice. They could range between 12.5% ​​to 36%. As a guarantee to the lender that he would not lose his money, commercial activity and especially maritime trade could be connected to insurance services in favor of the moneylender or the trader.9

94  The Protection of Private Property and the Rule of Law One typical case concerns a loan agreement between an Athenian and an Euboean merchant with two merchants from Pamphylia (Asia Minor), amounting to 3,000 drachmae. The goods concerned 3,000 amphorae of wine, and the contract stipulated that the amphorae should be loaded onto a ship in Chalcidice (Northern Greece), transported and delivered to a port in the Black Sea, with the ship returning to Athens with new cargo. The interest rate at which the Pamphylians borrowed was 22.5% (Cohen 1973, 158–198). Another incident is related in Demosthenes’s speech Against Timotheus (49.28) and describes an agreement for the transport of timber from Macedonia to Athens. The value of the fare was 1,750 drachmae. Ancient sources such as Plato’s Laws (12.953e) and Demosthenes’s Against Dionysodorus testify to similar cases of signed contracts. According to Cohen (1973, 129–136), there is no doubt that written contracts were a common commercial practice. Cohen (ibid, pp. 9–40, 93) argues that, when there were disputes between traders which ended in court, capable, knowledgeable and experienced judges of all legal matters were selected by lot to handle dikai emporikai (see also Dem., Ag. Lac., 35.43). Litigants had to provide all the relevant documents related to their case to the judges (such as contracts and accounts) as evidence. The Athenian legislation legally covered not only native Athenians but non-Athenians as well. At some point between 355 and 343/342, the Athenian judicial system adopted the requirement that dikai emporikai would be decided within a month so as not to hinder commercial activity. These trials were adjudicated immediately, without delays. According to North (1981), when laws work in practice, negotiation and enforcement costs are reduced once the basic rules of exchange have been formulated. This mentality is also apparent in the speeches of Xenophon (W.M., 3.3.) and Demosthenes (Against Phormio, 34.7–9; Against Nicostratus, 53.13; Ag. Lac., 35.10–11). Thus, there is no doubt that the Athenians had also realized the modern axiom that the fast conduct of trials related to commercial cases reduces what today are in known as transaction costs. As a rule, unlike the other Heliastic judges, those for dikai emporikai were not elected by lot but were appointed. The institutional body which decided their appointment is not clear. Lanni (2006, 152–153) expresses some doubts that the dikai emporikai judges were special judges. However, due to the complexity of the issues to be judged, it is logical to argue that dikai emporikai cases could not be presided over by the average Heliaia judge. Dikai emporikai ensured efficiency in the administration of justice through the high level of technical training of judges and through the speed with which court decisions were made. According to Cohen (1973, 9–40, 158–198) and Woolmer (2016, 82), during the fourth century BCE, foreign merchants had recourse to seek judgment in special maritime courts from two groups of experienced jurors: the xenodikai (literally meaning, jurors for foreigners) and nautodikai (literally meaning, maritime jurors). Any disputes over financial affairs between Athenians and foreign merchants were settled by xenodikai. Nautodikai were officials who performed some role related to cases tried under the dikai emporikai, but the exact nature of these duties is not clear. Such cases were adjudicated within a month so that justice to be provided rapidly.

The Protection of Private Property and the Rule of Law  95 A final question may arise: whether the Athenian legal institutions were manipulated, in practice, by powerful political and economic circles, mainly by the former aristocrats and, in general, the wealthy elite, as happens today, in various cases. The question, therefore, concerns whether there was a real status of isonomia. It is generally acknowledged that the Athenian state took measures to suppress delinquent conduct in matters of justice without discrimination between citizens, regardless of their income potential. Furthermore, the fact that every citizen had the right to sue any other citizen (public official or individual) proves the validity of the principle of isonomia in practice. There are no records from ancient sources that indicate that the Athenian system of justice was unjust, favoring either the poor or the rich. If the rights of well-to-do Athenians were not secure in Athens, why did they not choose to leave the city to better secure their property elsewhere? In fact, the opposite occurred: many non-Athenian wealthy individuals, such as Cephalus from Syracuse, and others from many city-states who were engaged in banking and had made a fortune in their city-states, chose to reside in Athens because it had such an effective institutional framework for protecting property rights through which they could benefit. As a final comment, several important ancient sources and modern evidence were cited here which prove beyond doubt that the Athenian state had developed, considering its time, a sophisticated judicial system. This system, which was favorable toward international trade, enabled the Athenian free-market institutions to flourish. More than 100 law court speeches from Classical Athens have been recorded, referring on various cases that are related to property and/or property rights protection. Thus, the view of some authors who do not accept that legal ownership systems did really exist in Ancient Greece should be refuted based on the above evidence. Notes 1 See further, among many others, Commons (1924), Demsetz (1964, 1967), Αlchian and Demsetz (1973), Barzel (1997, 2002), Hodgson (2001, 2015), Acemoglu and Robinson (2013) and Εconomou and Kyriazis (2014, 2017, 2019, b). 2 For example, not citizens, such as the case of the Athenian slaves. 3 For this discussion and the views from both sides, see Volume 11, Issue 4 of the Journal of Institutional Economics, (December 2015) as well as Hodgson (2015) and Barzel (1997, 2002). 4 With regard to the institutions of the Athenian welfare state, see Chapter 10. 5 I briefly remind the reader that, in economics, a negative externality is an indirect cost to an uninvolved third party that arises as an effect of another party's (or parties') activity. See in detail the seminal works of Pigou (1920), Coase (1960) and Baumol (1972) on this. 6 Elaboration on this important state post is provided in Section 8.3. 7 For the role of treasury-temples as financial institutions, I provide a detailed description in Section 6.4. 8 The socio-economic status of slaves is analyzed in Section 5.11. 9 The Athenian financial system, including banking and insurance services, is analyzed in detail in Chapter 6.

96  The Protection of Private Property and the Rule of Law Ancient Greek authors (Perseus Digital Library) Aristophanes, Wealth Aristotle, Athenian Constitution Aristotle, Nicomachean Ethics Aristotle, Politics Demosthenes, Against Aristogiton 1 Demosthenes, Against Callicles Demosthenes, Against Dionysodorus Demosthenes, Against Lacritus Demosthenes, Against Nicostratus Demosthenes, Against Phormio Demosthenes, Against Timocrates Demosthenes, For Phormio Hyperides, In Defence of Euxenippus Isaeus, On the Estate of Cleonymus Isocrates, Panegyricus Lysias, Defence Against a Charge of Taking Bribes Lysias, On the Confiscation of the Property of the Brother of Nicias Lysias, On the Property of Aristophanes Plato, Republic Thucydides, Histories (The Peloponnesian War) Xenophon, Oeconomicus Xenophon, Ways and Means

Modern authors Acemoglu, D., Robinson, J., (2013), Why Nations Fail, New York: Crown Business. Αlchian, A., Demsetz, H., (1973), ‘The property right paradigm,’ The Journal of Economic History, 33(1), 16–27. Avil´es, D., Mirhady, D. C., (2013), ‘Law courts,‘ in H. Beck (Ed.), A Companion to Ancient Greek Government, Malden, MA: Willey-Blackwell, 205–218. Barzel, Y., (1997), Economic Analysis of Property Rights, Cambridge, New York: Cambridge University Press. Barzel, Y., (2002), A Theory of the State. Economic Rights, Legal Rights and the Scope of the State, Cambridge: Cambridge University Press. Baumol, W. J., (1972), ‘On taxation and the control of externalities,’ American Economic Review, 62(3), 307–322. Canevaro, M., (2018), ‘What was the law of Leptines’ really about? Reflections on Athenian public economy and legislation in the fourth century BCE,’ Constitutional Political Economy, 29, 440–464. Carugati, F., (2019), Creating a Constitution: Law, Democracy, and Growth in Ancient Athens, Princeton: Princeton University Press. Coase, R. H., (1937), ‘The nature of the firm,’ Economica, 4(16), 386–405. Coase, R. H., (1960), ‘The problem of social cost,’ Journal of Law and Economics, 3(1), 1–44. Cohen, E. E., (1973), Ancient Athenian Maritime Courts, Princeton, NJ: Princeton University Press.

The Protection of Private Property and the Rule of Law  97 Cohen, E. E., (1992), Athenian Economy and Society: A Banking Perspective, Princeton: Princeton University Press. Commons, J. R., (1924), Legal Foundations of Capitalism, New York: Macmillan. Demsetz, H., (1964), ‘The exchange and enforcement of property rights,’ Journal of Law and Economics, 7, 11–26. Demsetz, H., (1967), ‘Toward a theory of property rights,’ The American Economic Review, 57(2), 347–359. Economou, E. M. L., Kyriazis, N. C., (2014), ‘Property rights and democratic values in preClassical Greece,’ Social Sciense Tribute, ΙΣΤ(63), 46–59. Economou, E. Μ. L., Kyriazis, N. C., (2017), ‘The emergence and the evolution of property rights in ancient Greece,’ Journal of Institutional Economics, 13(1), 53–77. Economou, E. M. L., Κyriazis, N. C., (2019a), Democracy and Economy: An Inseparable Relationship Since Ancient Times to Today, Newcastle upon Tyne: Cambridge Scholars Publishing. Economou, E. Μ. L., Kyriazis, N. C. (2019b), ‘The evolution of property rights in Hellenistic Greece and the Ptolemaic Kingdom of Egypt,’ Journal of Institutional Economics, 15(5), 827–843. Harrison, A. R. W., (1968), The Law of Athens: Property, New York: Oxford University Press. Hayek, F. A., (1981), Law Legislation and Liberty. Rules and Order, Vol. 3, Chicago: University of Chicago Press. Hodgson, G. M., (2001), How Economics Forgot History: The Problem of Historical Specificity in Social Science, London, New York: Routledge. Hodgson, G. M., (2015), Conceptualizing Capitalism: Institutions, Evolution, Future, Chicago: University of Chicago Press. Johnstone, S., (2011), A History of Trust in Ancient Greece, Chicago: The University of Chicago Press. Knack, S., Keefer, P., (1995), ‘Institutions and economic performance: Cross-country tests using alternative institutional measures,’ Economics and Politics, 7(3), 207–227. Lanni, A. M., (2006), Law and Justice in the Courts of Classical Athens, Cambridge: Cambridge University Press. Lyttkens, C. H., (2013), Economic Analysis of Institutional Change in Ancient Greece. Politics, Taxation and Rational Behaviour, London, New York: Routledge. MacDowell, D. M., (1978), The Law in Classical Athens, Ithaca, NY: Cornell University Press. North, D. C., (1978), ‘Structure and performance: The task of economic history,’ Journal of Economic Literature, 16(3), 963–978. North, D. C., (1981), Structure and Change in Economic History, New York: W.W. Norton and Company. North, D. C., (1990), Institutions, Institutional Change and Economic Performance, Cambridge: Cambridge University Press. North, D. C., Thomas, R. P., (1973), The Rise of the Western World: A New Economic History, Cambridge: Cambridge University Press. North, D. C., Weingast, B., (1989), ‘Constitutions and commitment: The evolution of institutional governing public choice in seventeenth-century England,’ The Journal of Economic History, 49(4), 803–832. Ostrom, E., (1990), Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge: Cambridge University Press.

98  The Protection of Private Property and the Rule of Law Pigou, A. C., (1920), The Economics of Welfare, London: Macmillan. Williamson, O., (1975), Markets and Hierarchies: Analysis and Antitrust Implications, New York: Free Press. Williamson, O., (1990), ‘The new institutional economics: Taking stock, looking ahead,’ Journal of Economic Literature, 38, 595–613. Woolmer, M., (2016), ‘Forging links between regions: Trade policy in classical Athens,’ in E. M. Harris, D. M. Lewis, M. Woolmer (Eds.), The Ancient Greek Economy: Markets, Households and City States, New York: Cambridge University Press, 66–89.

5

The Athenian Market

5.1 The Athenian Agora When meeting in Sardis with ambassadors from Sparta, who were delivering a protest against interference in the affairs of the Hellenes of Ionia, Cyrus, Persian “King of Kings,” ironically replied: I never yet feared men who set apart a place in the middle of their city where they perjure themselves and deceive each other. (Herodotus 1.153) But he was wrong! The existence of the agora institution in Greek poleis at the time was directly linked to their vitality and power potential in general. Agorai (plural form) were the center of economic, political and cultural activities in Greek poleis, and their existence is attested not only for Athens but also for a large spectrum of poleis, such as those in the Aegean, including Delos, Rhodes and Miletus (Bresson 2022; Fachard and Bresson 2022, 118). Small poleis had only one agora, but large poleis, such as Athens, had several. The twin cities of Athens and Piraeus, had two, as well as a series of local agorai in the countryside (Bresson 2022, 230). During the fifth century BCE, northwest of the Sacred Rock of the Acropolis, between the hills of Areiopagos and Agoraios Kolonos, lay the agora of Athens, which, for at least the consequent four centuries, was the center of the city’s economic life. Until its destruction by a barbaric Germanic tribe, the Herules, who inflicted great damage on the city in 267 AD, the agora was the public, commercial, administrative, social and cultural heart of the city. The existence of the Athenian agora dates back to the Archaic period (Elliot 2020, 75). Primitive versions of agorai dated back to even earlier times. At the agora, everyone could bring his/her products and sell them freely under the protection of the law. Bresson (2014, 53) adds that a specific characteristic of the Greek polis was the existence of two institutions: the agora, or internal market, and the emporion, or market dedicated to international trade. Some of the most important public buildings of the Athenian polis were located in the agora, among them, the Prytaneion, the Metroon, the Bouleuterion and the Heliaia court. The Metroon, a temple dedicated to the so-called mother goddess, being also the building where the archives of the written laws of the state were DOI:  10.4324/9781003434146-5

100  The Athenian Market stored, was placed next to the Bouleuterion. When the New Bouleuterion building replaced the Old Bouleuterion, the latter turned into a central record office for state archives. ​ The agora was full of public buildings and galleries. The primary role for the creation of agorai was to provide space for all kinds of public gatherings: people’s assemblies, athletic games, musical performances, commercial activities and so forth (Hölscher 2007, 171). Wealthy city-states such as Athens and many others invested a large amount of resources in developing the infrastructure of agorai, as this was seen as a way to increase the volume of market transactions, which was directly related to the economic prosperity of the polis (Harris and Lewis 2016, 29). One of the most important monuments was that of the Eponymous Heroes (famous heroes) at the front of the Heliaia courthouse in the southern part of the agora. It was built in honor of the heroes who had given their names to the ten tribes of Athens. Its base served as a public bulletin board (such as conscription, notices of impending trials, agendas for public assemblies, draft laws, etc.). The agora was very large and, as also happens today, was divided into different sections, each taking its name from grouped occupations, e.g., separate areas for butchers, tanners, stonemasons, etc. (Harris and Lewis 2016, 12). This distinction is, among others, mentioned by Aristotle in Politics (7.1331b).1 The agora was the home of many statues, altars and fountains, with the most famous being the Poikile Stoa and the Stoa of Zeus Eleutherios. These porticos protected the throngs from the sun and the rain and hosted many shops and workshops. Petty traders performed their operations under stalls or tents (Bresson 2022, 227). The Poikile Stoa, decorated with themes such as the Battle of Marathon, was a kind of open-air museum, the first of its kind in history, in which Athenians and foreigners could enjoy live depictions from Athenian history and art. Some of the most important buildings of the Ancient Agora of Athens, related to the political and social life of the polis, are numbered from 1 to 20 in Table 5.1, based on the information and the wonderful images and sketches provided by Travlos (1980), Camp (2003) and Lang (2004). ​

Image 5.1  The location of the agora of Athens (the Acropolis is in the background on the right). Source: https://commons​.wikimedia​.org​/wiki​/Category​:Ancient​_Agora​_of​_Athens#​/media​/File​:Agora​ _of​_Athens​_05​.jpg.

The Athenian Market  101 Table 5.1 Public buildings in the Athenian agora (fifth century)   1. Peristyle square law court   2. The Athenian (state) mint known as Argyrocopeion   3. Fountain House   4. South Stoa (portico)   5. Heliaia court   6. Strategeion   7. Benches of Agora Hill   8. Tholos/Prytaneion   9. Agora Stone 10. Monument of the Eponymous Heroes

11. Metroon/Old Bouleuterion 12. (New) Bouleuterion 13. Temple of Hephaestus (Theseion) 14. Temple of Apollo Patroos 15. Stoa of Zeus 16. Altar of the Twelve Gods 17. Royal Stoa (portico) 18. Temple of Aphrodite Urania 19. Stoa of Hermes 20. Stoa Poikile

Image 5.2  Spatial illustration of the ancient agora (fifth century) and the mint (building No. 2). Source: Image prepared by the author.

Near the agora there were the so-called pantopoleia, “supermarkets” one might call them, where a large variety of goods was available, from food to hoplite military equipment (Johnstone 2011, 22, 40). There were also various workshops, some employing up to 10 people – both men and women, metics or slaves – dedicated to handicraft enterprises of pottery, carpentry, bags, footwear, musical instruments, shops selling wine, perfume, women’s ornaments and agricultural products as well as florists, bakeries, fishmongers and food stalls which might also prepare meals

102  The Athenian Market for a symposium. Various food items were traded, such as figs, grapes, pears, turnips, apples and other fruits and vegetables; cow’s milk and other dairy products; and specialty items such as lamb tripe stuffed with liver and spices, honeycombs, chickpeas, etc. (Arist., Fr. 857; Wasps, 1389; Thesmophoriazusae, 448, 457, Plato, Rep., 2.372b–373d). Among other things, products and byproducts related to maritime commerce were on offer such as wood, canvas, red ocher and paint, resin, zinc, iron, copper and, perhaps, some kind of tar for sealing. In the markets of Athens and the port of Piraeus, any citizen or foreign traveler could find almost any of the products of the known world. Kallet (2007, 75) argues that Piraeus could be both a trans-shipment point for goods and the final destination of imports. Piraeus developed into the first historically recorded international commercial and transit center, what today is characterized as entrepôt (Burke 1992, 204; Cohen 1992, 16, 141; Bresson 2016b; Harris and Lewis 2016). A wide spectrum of services was offered in the agora as well. There was a large extent of division of labor and occupations in the economy. Harris (2002, 88–99, 2016), Βresson (2007) and Harris and Lewis (2016) provide a long list of professions practiced in Athens during the Classical period. Jew (2022, 204–206) provides a synthesis of this evidence, which leads to more than 200 professions in total. There seems to have been concentrated markets for specific products such as the poultry market (Demosthenes, On the False Embassy, 19.245). There were markets for bags and medicines (Demosthenes, Against Olympiodorus, 48.12), markets for the process and dyer of woolen garments and a market for timber and copper. Pammenes from the deme of Erchia was a goldsmith and had a store in the agora (Demosthenes, Against Meidias, 22). Xenophon (Mem., 2, 7, 6) mentions people who were specifically involved in the production of fabrics and tunics. He describes Socrates’s advice to a poor man to use the women who resided in his house to produce cloth for sale to provide the necessities of life. Similarly, Aeschines (Against Timarch, 1.97) states that Timarchus used skilled female slaves in his house to produce elegant fabrics that he sold in the agora. Hermippus, a comedian who wrote in 420 BCE, gives an impressive list of exotic products available in the market of Athens: silphium (a plant used in the preparation of medicines and spices); ox skins from Cyrene in Libya; mackerel and salted fish from the Hellespont, pork and cheeses from Syracuse; canvases, ship rigging and papyrus from Egypt; cypress wood from Crete; ivory from Libya; raisins and dried figs from Rhodes; pears and apples from Euboea; mercenaries from Arcadia; slaves from Phrygia; slaves with or without tattoos from Pagasae; acorns and almonds from Paphlagonia (Asia Minor); wheat flour and Tyrian purple from Phoenicia; and carpets and pillows from Carthage. Van Alfen (2016) provides a very detailed and long list of products that were exchanged between what he calls as the Aegean–Levantine trade around 600–300 BCE such as jewelry, herbs and spices for both medicinal and culinary purposes, glass, dried fruit, minerals, furniture, exotic animals and precious stones (see also Bresson 2016a, b; Kron 2016). Available for sale were even ballot boxes, hourglasses and written law documents such as indictments, extraditions and court cases as well as summonses

The Athenian Market  103 for judges and documents to be filled by witnesses, etc. In the agora, there were also specialty shops dedicated to clothing, fabrics and other goods meant only for women. Often, this clothing was quite expensive, thus, pushing many women into undertaking the manufacture of clothing at home. Services further included barbershops (Lysias, Against Pancleon, 23.3) and hiring slaves, metics, or even free citizens as carriers for a salary (Demosthenes, Against Leochares, 44.4). In the time of Aristophanes, self-employed women farmers or weavers were looked down on, but in the time of Demosthenes, this work was praised and presented as an honest social and economic effort in the upbringing of children. Other occupations for women included, among others, child care and selling ribbons in the agora (Demosthenes, Against Eubulides, 57.35). There was a special area where slaves were traded. There were also craftsmen, artisans and small-scale traders who paid visits to houses to offer goods and services. Goods were sold mainly in designated market areas, but there were also street vendors who attended various social and religious events to set up shop and sell their merchandise. Smaller marketplaces could also be found in other areas and villages throughout Attica, just as happens today. Street stalls with products for sale also existed. In the Athenian agora, Athenians as well as foreigners could borrow money from individuals such as pawnbrokers who were providing banking services (Dem., F Ph., 36.1; Ag. Lac., 1). Land could be rented for cultivation for a term of 1, 2 or 3 years. Horses could be rented as well; if the animal was not returned in full health, the owner received compensation of 12 minae (Lysias, Accusation of Calumny, 8.10), that is, 1,200 drachmae, a large sum of money. In addition to rooms at an inn, houses could also be rented, as happens today.2 The agora had many promenades lined with columns and arcades and was a place where Athenians indulged in their favorite pastime, lively conversation. Most citizens did their own shopping, but others had slaves who were experts in this activity or used their female servants for this purpose. In the agora, one could find Socrates speaking out and, a century later, the Stoic philosophers. As is known from a famous speech in court by Lysias (On the Refusal of a Pension, 24.20), much like today, groups of Athenians and foreigners alike had their favorite hangouts – a barbershop, a shoe store or one of many other places within the agora – where they could meet and discuss the issues of the day. The inhabitants of the deme of Dekeleia gathered in a barbershop next to Hermeion, and on the first of the month, there were street stalls offering cheeses, mainly run by Plataean traders in exile who enjoyed Athenian citizenship (Lysias, Against Pancleon, 6–7), as well as vendors offering a special delicacy, eels from lake Kopais. During the opening hours of the agora, any citizen could attend not only for shopping but also to find company for discussion. Even loafers attended the agora. Avoiding the agora, in general, was considered reprehensible behavior. Thus, the agora was not only a place for buying and selling goods and services but also a place for exchanging ideas and information and socializing, which was part of the mentality of a face-to-face society like the Athenian one. Therefore, the Athenian agora could also be seen as a “market of ideas.” This aspect of the agora had another

104  The Athenian Market useful value. These discussions offered the benefit of free exchange of information, and this contributed to what is, today, characterized by Jones et al. (1997) as a network governance system, even if of a primitive nature regarding our case study. Manville and Ober (2003) and Ober (2008, 118–141) provide an illuminating analysis on how social networking and social interaction was taking place in practice and how this proved effective for the overall evolution of the Athenian society. 5.2 Profit-making and the Forces of Supply and Demand Aristotle (Pol. 1.1258a, 1–10) argues that the basic motivation for the chrematistike (money-making) kind of economic activity, through transactions, is kerdos (profit-making). He characterizes the procedures that one has to follow to achieve profit as “the art of wealth making” (Pol., 1258a.20). Also important is that in the daily transactions in the agora, as a general rule, the prices of goods and services were determined according to the forces of supply and demand. In particular, Xenophon (WM., 4.36) explains that when there was excessive demand or supply for a good, market prices were affected as well as the number of producers who were supplying their goods and services. Plato (Rep., 2.371b) describes how markets are necessary for the exchange of goods and services through the intermediation of money: “But again, within the city itself how will they share with one another the products of their labor? This was the very purpose of our association and establishment of a state.” “Obviously,” he said, “by buying and selling.” “A market-place, then, and money as a token for the purpose of exchange will be the result of this.” Aristotle further argued that the value of a product should be determined by the cost of labor (wage) which was used for its production (Arist., Nic. Eth., 1133a–b). Xenophon (Oec., 20.27–28) writes that the entrepreneur tries to achieve the highest profit by trying to sell his products in those markets where there is a great demand for them. Xenophon’s assumption is a key profit strategy in modern economics as defined by the demand and supply mechanism; in such a market, where the demand for the product is high, the entrepreneur will try to sell the products at higher prices, thus, achieving higher profits. Again (Oec., 5.12), Xenophon offers praise for another profitable strategy, one employed by Ischomachus’s father; having specialized knowledge of cultivation, he bought uncultivated land at low prices, then cultivated these places efficiently, raising their commercial value in the market, and finally sold them at a higher price to make a profit. Such a description makes me believe that at least some of the ancient Greek entrepreneurs of the times also understood the basic logic of what Schumpeter (1934, 1939) and Kirzner (1973) explained, in a very sophisticated way, as discovering and/or exploiting entrepreneurial opportunities for profit-making. Further evidence that market forces were present in the daily practice of commercial transactions in the Athenian economy is again provided by Xenophon

The Athenian Market  105 (W.M., 4.3–5). He argues that because the silver mining business was booming and employing an ever-expanding workforce, there was excessive demand for manpower in this high-growth sector. Except the slave labor, which made up the majority of the workforce, free citizens could work in the profitable mines by engaging in various activities because they could demand better wages there. It also appears that Xenophon understood, at least to some extent, the basic concept of the law of diminishing returns almost 2,000 years before philosophers such as Johann Heinrich von Thünen, Jacques Turgot, Adam Smith, Thomas Robert Malthus and David Ricardo introduced it. This law states that in productive processes, increasing a factor of production by one, e.g., adding a worker in a production process while holding all others constant (ceteris paribus), will at some point return lower output per incremental unit of input (Samuelson and Nordhaus 2010). Xenophon (W.M., 4.4–5) observed this and wrote: Further than this, every farmer can tell just how many yoke of oxen is enough for the farm and how many laborers. To put more on the land than the requisite number is counted loss. In mining undertakings, on the contrary, everyone tells you that he is short of labor. But perhaps the most characteristic proof that market forces were present and responsible for labor transfers from one sector of production to the other is the following passage in Xen (W.M., 4.6). Mining, in fact, is quite different from other industries. An increase in the number of coppersmiths, for example, produces a fall in the price of copper work, and the coppersmiths retire from business. The same thing happens in the iron trade. Again, when corn and wine are abundant, the crops are cheap, and the profit derived from growing them disappears (emphasis added by the author), so that many give up farming and set up as merchants or shopkeepers or moneylenders. But an increase in the amount of the silver ore discovered and of the metal won is accompanied by an increase in the number of persons who take up this industry. This passage provides a primordial version of the supply demand mechanism before being introduced and defined in detail by Adam Smith almost 2,000 years later. One additional observation deserves to be expressed regarding these lines. It seems that Xenophon also had an idea, at least to some degree, of what J. Schumpeter (1934, 1939) described as the “business cycles” theoretical concept. Through Xenophon’s logic that “the coppersmiths retire from business,” it seems that, among others, he understood that the number of firms entering a profit-making production sector cannot be unlimited because, as it is known, from a specific point and later on, the profit margin can be very small, and companies cannot make profit in this particular sector, so they exit. This Schumpeterian concept is depicted in Figure 5.1.

106  The Athenian Market

Peak Growth

Recession

GDP

Trough or Depression

Time

Figure 5.1  The business cycle theoretical concept.

Furthermore, Xenophon (W.M., 2.9–14, 4.17–22, 4.30–32) proposed the intensification of the exploitation of the Laurion mines so as to increase the public revenues of the polis through:

• Inviting more metics so that the state revenues to be increased through the metoikion tax.

• Introducing further measures in favor of merchants and employers doing business in Athens.

• Boosting commercial activity by making further investments in infrastructure in the port of Piraeus.

• Speedy litigation regarding commercial cases (dikai emporikai). • Constructing inns to host those merchants and sailors from other poleis or countries who are doing business at the port of Piraeus and Athens in general.

• Awarding prizes and honors to those foreign traders who benefit Athens with their commercial actions.

• Increasing the custom duties at the ports of Piraeus. The above important economic policies Xenophon proposed are capitalistic in nature. However, there are still some authors who maintain the primitivist assertions and argue that Xenophon’s above views are not related to the modern market logic because, by contrast, the logic of the ancient Greeks was to interact with nature and not to establish the market logic, etc. These views naturally echo the monolithic and dogmatic assertions of the ideologically biased primitivists regarding the evolution and the success of the institutions of the ancient Greek economy. Regarding price differentiations, such a phenomenon was also present in the markets throughout Attica. For example, a tunic in 388 BCE cost about 20 drachmae.

The Athenian Market  107 Unskilled workers in 329–328 received 1.5 drachmae a day, while the skilled ones about 2.5, or about twice that of unskilled workers (Arist., Wasps, 788–790; Loomis 1998, 232–250). A loaf of bread cost an obol, a lamb 8 drachmae, a liter of olive oil cost about a drachma, a pair of shoes between 8–12 drachmae, a slave went for 200–300 drachmae and a house between 400–1,000 drachmae. Fish was popular. For example, eels cost at least 12 drachmae, a high price, because they were in high demand (Loomis 1998, 103, 111). Like the rowers of the fleet, Athenian hoplites received a daily wage from the state when in active service (Lyttkens and Gerding 2022). Pritchard (2015, 25), based on Thucydides (3.17.4, 6.8.1, 6.31.3, 7.27.1–2), argues that daily pay for both Athenian thetes and hoplites was 1 drachma between 433/432 and 412/411. According to Andreades (1933, 220–221), around 420 BCE, Athenian garrison soldiers were receiving (at least) 3 obols a day while hoplites and archers were each paid at least 4 obols a day. In total, the land forces cost between 120 to 140T. Andreades believes that the total for military expenditures was about 300T, and this estimate is conservative. A lochagos (the captain of a lochos (battalion or regiment) in a hoplite phalanx) received twice the salary of an ordinary hoplite soldier in a phalanx, while the strategos, the head in a phalanx, received four times the salary of a hoplite. In principle, salaries were based on the importance and weight of each profession, as is the case in modern economies. Price differentiation was also obvious regarding services on education. For example, some philosophers or sophists demanded higher wages for teaching their rhetoric techniques to their students. This was because the market itself had assessed that the services provided by those philosophers were of a very high standard, or higher than those provided by some of their colleagues, so they were truly worth a greater value. Thus, the price differentiation was related to the quality of service, as happens also in modern economies. The same applied also to the compensation of doctors, as will be further analyzed in Section 10.2.4. The more famous and capable the doctor, the higher the price he could charge his clients for his services. This intertemporal axiom applied even to women who entertained people in the erotic arts – prostitutes and hetairai (equivalent, one might say, to Japanese geishas or French courtesans of the sixteenth and seventeenth centuries). The price for their services was 2 drachmae (about as much as two daily wages in the fifth century) for “high-quality” prostitutes (like today’s call girls), but just 3 obols (half a drachma) for the “average” ones. In a class of their own, hetairai such as Phryne and Neaira might have received 10 drachmae, or even more. In the literature, references to even astronomical amounts can be found – as high as a whole talent (6,000 drachmae)! But these references are found in texts by comic writers, etc. and are deliberate exaggerations (Loomis 1998, 184–185). The hetairai, on the other hand, were not simple prostitutes. They had physical beauty but also intellectual training and possessed artistic talents. They did offer (paid) sexual services, but some of them were the most cultivated women of their times, able to entertain their clients not only with “quality” art (song, dance, sex) but also philosophical discussion.

108  The Athenian Market Finally, this discussion regarding price differentiation of goods and services in Classical Athens can also be described by the following equations. An Athenian or a metic or foreigner as consumers had access to a plethora of products such as:

xi  0, i  1, 2,  n

(5.1)

in the international market of Athens. Consumers could purchase these products subjected to their income limitation as also happens today as the following equation denotes.

p1  x1  p2  x2  pn  xn   p1  x1  I

(5.2)

where:

• I is a consumer’s income for a specific period of time. I can increase at period

x1 if the consumer borrows money at period x1; thus, his/her income will be reduced the next period, x2, when he/she will have to repay these money. • p1, p2, ……pn are the various prices of products that a consumer finds in the Athenian market. • x1, x2……xn are the products as presented in the market. The Athenian customer (citizen, metic, slave) or a foreigner who temporarily lives in Athens, has a plethora of choices of goods to purchase or not; but in any case, it applies that: x1 ≥ 0, x2 ≥ 0,……. xn ≥ 0

(5.3)

I assume that the basic attitude of the above consumers in the agora of Athens was, to a further or lesser extent, the same as to what consumers face in modern societies – that is to optimally combine the purchase of a series of goods (or services) to increase their marginal utility based on an income constant for a given time, as modern microeconomic theory argues. In other words, for every citizen, metic, slave or foreigner in the agora of Athens, it applied that:

max u x1. xn  x1, x2. xn 



s.t.



n x1 xn

pi  xi  I

(5.4) (5.5)

5.3 Consumer Protection and Measures against Profiteering Profits and wealth achieved through unfair or immoral activities were criticized by society, and this is reflected in the views of many philosophers such as Isocrates (On the Peace, 8.31, 8.125), Aristophanes (Wealth) and Hyperides (In Defence of Euxenippus, 32). Isocrates (To Demonicus, 1.38) provides a very apt quote which examines profit, wealth and poverty in terms of moral standards; moral behavior provides us eternal glory, while aischrokerdia (profiteering) only ephemeral gains. He writes:

The Athenian Market  109 Prefer honest poverty to unjust wealth; for justice is better than riches in that riches profit us only while we live, while justice provides us glory even after we are dead, and while riches are shared by bad men, justice is a thing in which the wicked can have no part. According to Aristotle (Nic. Eth., 1122a. 10–15; Eud. Eth., 3.1232a. 10–15), profiteering denoted a moral decline in society. In practice, to ensure the proper functioning of the market, the Athenian state had established various mechanisms of consumer protection through special groups of state magistrates. These were: i) the ten epimeletai tou emporiou, ii) the ten agoranomoi, iii) ten metronomoi, iv) the ten sitophylakes and (v) the ten sitonai. These magistrates were charged with making continuous market inspections and imposing penalties and fines in the event of irregularities. The first and the second group had similar duties, supervising the smooth functioning of the market: The ten epimeletai tou emporiou (trade supervisors) oversaw the warehouses of imported commodities, in general, and of grains, in particular, arriving at the port of Piraeus. They also examined accusations against those sitemporoi (grain merchants), known also as sitopolai (sellers of grain), suspected of trying to make an excess profit on the sale of their grain. They also made sure that the sitemporoi brought two-thirds of the grain they imported onto the Athenian market (Figueira 1986, 151; Fröhlich 2013, 259). This was crucial because of the critical grain shortages that the Athenians frequently faced. Bresson (2016a, 409–411) has estimated that, with a total population that probably was not above 250,000 inhabitants during the fourth century, the dependence on grain imports from outside Attica was around 73%. The importance of cereals for feeding the Athenian population is verified by the following two incidents. First, Thucydides (3.86) informs us that the Athenians decided to launch the Sicilian Campaign not only for geostrategic purposes but also to prevent the exportation of Sicilian corn to Peloponnese. Thucydides implies here that the Athenians also wished to exploit the grain of Sicily. Second, in the late summer of 340 BCE, shortly before the Battle of Chaeronea, King Phillip II of Macedon seized the cargoes of 240 Athenian merchant ships that were carrying critical supplies of wheat – a great misfortune for the Athenians and their prosperity. Cimmerian Bosporus (today’s Crimea) produced an abundance of grain, including high-quality wheat that was suitable for making good bread (Migeotte 2009, 157).3 The Athenians were consuming 21,000 tons of wheat from Crimea and 63,000 from imports from other areas, totaling 400,000 medimnoi, that is approximately 24,000 tones. Phillip II had also succeeded in seizing the strategic city-state of Amphipolis, leading to Athens’ ultimate loss of access to the lucrative gold mines of the region and the loss of Mount Pangaio. It is highly probable that these two strategic moves by Philip II provoked financial damage that affected, at least to some degree, the economic aspect of the Athenians’ military preparation before the battle of Chaeronea that happened less than two years after these events. The second group, the agoranomoi, was responsible for ensuring that the prices of goods in the market were not excessive. They were ten in number, each one

110  The Athenian Market originating from each of the ten Athenian tribes. Opportunistic price increases through market manipulation or the exploitation of sudden changes in supply and demand were considered unfair and abusive and denounced (Lysias, Dls., 5–7). Thus, fines were imposed on those merchants who were trying to benefit themselves through profiteering. The agoranomoi also had to ensure that the quality of the products met their specifications (Arist., Ath. Const., 50.1, 51.1; Plato, Laws, 6.764 b–c; Ober 2008, 253; Migeotte 2009, 144, 147–149; Fröhlich 2013, 258; O’ Halloran 2018, 273; Rahyab 2019; Bitros et al. 2020; Bresson 2022, 238). According to Aristophanes (Wasps, 1408), the agoranomoi further resolved disputes among merchants. These actions were critical in combatting profiteering (Bresson 2016, 246– 251; Elliot 2020, 75; Bitros et al. 2020; Economou et al. 2021a, b; Halkos et al. 2021). They also ensured that transactions in the market were conducted without fear of violence or intimidation between trading parties (Harris and Lewis 2016, 30). In the event an agoranomos was found to lack experience, be ignorant about an issue or was found guilty of theft, he was punished. The penalties imposed, however, were not very severe (Demosthenes, Ag. Tim., 24.112). Aristotle (Pol., 6.1321b) describes agoranomoi and why international commerce is beneficial: First among the indispensable services is the superintendence of the market, over which there must be an official to superintend contracts and good order; since it is a necessity for almost all states that people shall sell some things and buy others according to one another’s necessary requirements (emphasis by the author), and this is the readiest means of securing self-sufficiency, which seems to be the reason for men’s having united into a single state. The supervisory role of the agoranomoi reduced the financial risks that were related not only between two parties but also between the financial system as a whole, through which a multitude of transactions was taking place. This means that through their intervention in the market, information asymmetries, in the logic of Akerlof (1970) and Tirole (2017), regarding real prices in the market and the purity of the currency were significantly diminished to the benefit of the consumers as a whole (Economou et al. 2021a, b; Halkos et al. 2021). The office of the Athenian agoranomia (market police) was located in the socalled Stoa of Zeus, near the Poikille Stoa and the Basileios Stoa, on the east side of the agora and, more specifically, on the hill of the Agoraios Kolonos. The fact that the agoranomia service was located in this particular stoa had a symbolic character: because Zeus was the god of order, this service was intended to maintain eunomia in the marketplace through combating cases of corruption. To perform commercial activity, each seller of goods used a special scale that had to be procured through the agoranomia with which he would weigh his goods in front of the customer so that the possibility of fraud at the expense of the customer could be avoided. These special scales bore the official stamp with the seal

The Athenian Market  111 of the state on them. Seasonal sellers could rent such scales from the agoranomia rather than buy them, to reduce costs. As a final comment, the importance of the agoranomoi as an institution can be additionally deduced by the fact that other city-states also introduced them, and their existence is also attested during the Hellenistic period such as in Athens, Rhodes, the Achaean League and the Ptolemaic Kingdom of Egypt (Mackil 2013; Economou and Kyriazis 2015, 2018; Rahyab 2019; Economou 2020). Manning (2018, 209) writes characteristically that: Regulations were formalized in “market law” (nomos agoranomikos) documented at Athens and Rhodes, but these rules were broadly applied throughout the Greek world. Cities controlled market exchange, collecting a fee from merchants for the right to sell in the market and a sales tax for transactions. The agora reduced transaction costs by lowering the cost of information, guaranteeing quality and weights, and regulating “fair” prices. Costs of trials at Athens were low. Regarding the third group, the duty of the metronomoi was to check whether sellers invoiced their goods using the correct weights and measures (Arist., Ath. Const., 51.2; McAuley 2013, 181; Bresson 2016, 239, 241, 496, n. 166). Merchants were required to test their measuring devices against official standards.4 The procedure was taking place at the Tholos building, under the watchful eye of the Council, members of which also acted as supervisory mechanisms of the state. The laws forbade fraud with regard to the quantity of goods that were sold. For example, it was forbidden to add water to wine or milk, to sell flour mixed with bran or to mix cheaper barley flour with more-expensive wheat flour (Bresson 2022, 228–229). Thus, like the first two groups, the metronomoi also fought against profiteering (Johnstone 2011, 54; Woolmer 2016; 84). The metronomoi were chosen by lot. With the fourth group, the ten sitophylakes (wheat guardians), the Athenians aimed at any practice that could cause artificial and illegal price increases in the grain market. The number of sitophylakes grew in the late fourth century. Spreading rumors about shortages in grain/wheat imports could artificially increase demand and prices and was considered illegal (Arist., Ath. Const., 51; Lysias, Dls., 8, 13–16) because this could lead to inflation, as is happening today in the European Union because of the Russo-Ukrainian War, causing further harm to the real incomes of the citizens. In fact, according to Demosthenes (Ag. Lacr., 911), wheat exports were banned by law due to the perennial shortages of this product. In addition to the spreading of false rumors, another way through which the sitopolai tried to impose artificial price increases in grain was to unite with each other and, thus, control the grain supply, enabling them to sell their merchandise at excessive prices, making illegal profits (Lysias, Dls., 5–8, 12, 15–16). This description denotes that the sitopolai often tried to impose what today might be called a cartel onto the grain market. What Lysias is describing at this point is essentially the first-ever policy against such cartels. Concerning this, Aristotle (Pol., 1259a. 5–35) describes such an attempt to distort market competition by trying to impose

112  The Athenian Market a monopoly to artificially inflate prices; this, of course, was against the common good and was denounced. The above opportunistic behaviors constituted serious reasons for the state authorities to intervene in the grain market. Unless they did this, the cohesion and the prosperity of the society could be harmed because cereals were vital for feeding the people satisfactorily. That was why the Athenians established the special body of sitophylakes to combat the malicious designs of some sitopolai (Arist., Ath. Const., 51; Johnstone 2011, 28; Bresson 2016b). Sitophylakes were also empowered to impose ceilings on cereal prices to prevent monopolies and the exploitation of consumers (Lysias, Dls., 5–7; Bitros et al. 2020, 123). Today, this is called a price controls policy. Regarding the fifth group, the oversight on the wholesale market and the import of sufficient quantities of wheat was also related to the duties of another body of elected public officials: the sitonai. For a while, there was a synergy between the sitophylakes and the sitonai regarding the collection of wheat taxes from the islands of Lemnos, Imbros and Skyros. It is also important to mention that if sitonai members behaved illegally, they could be even sentenced to death (Lysias, Dls., 17–21). That such a severe punishment was decreed underscores how absolutely vital efficient grain management was to the prosperity of the Athenians. In general, the prices of goods in the market were determined by the laws of supply and demand. However, because they were absolutely vital for the smooth operation of the polis, the markets for cereals, oil, coal and timber were excluded from this law and subjected to state control. Fluctuations in wheat prices were permitted only based on a change in supply, mainly predicated on an increase or decrease in imports (Demosthenes, Against Dionysiodorus, 56.8–10; Bresson 2016b). There should be no doubt that the Athenians established the above key posts to ensure the credibility and functionality of their internationalized market and, of course, to ensure the well-being of their citizens. Ober and Scheidel (2022, 415) acknowledge that although the Greeks lacked a general theory of prices and markets, they, however, managed to establish rules to protect individuals from exploitation and to guide individual choices to invest in human and social capital, and this led to the emergence of a comparatively vibrant, at least partially marketbased, economy, in which the basic market mechanisms were understood by Greek theorists. As a final comment, the agora was the center of the activities of Athenian social life by significantly affecting the lives of those who made use of the services and opportunities it provided. Aeschines (Ag. Ct., 186) writes characteristically that: And now pass on in imagination to the Stoa Poecile; for the memorials of all our noble deeds stand dedicated in the Agora. 5.4 The “Secondary” Sector of the Economy and the Port of Piraeus In the agora of Athens, a large volume of products was sold to the production of which a large number of either slaves, metics or free citizens was dealing with.

The Athenian Market  113 There were, for example, various workshops for making shields, beds, etc. (Lysias, Ag. Er., 12.8, 12.19). There were also larger workshops, some employing 80 to 100 people, such as shipyards, arms manufacturers, tanneries, workshops making knives, or others making campaign boots. The wealthy banker, Pasion, for example, was the owner of a shield-crafting business that employed 60 slave-workers (Demosthenes, F. Ph., 36.11). The fact that Pasion, who was one of the richest Athenians, parallel to his successful banking activities, also maintained a shield-crafting workshop, is another element of the dynamics and the many modern features of the Athenian economy: an entrepreneur in Athens was not necessarily limited to a specific specialization (in this case, banking services), but due to the favorable business environment, the entrepreneurial activities of a person could be extended to other areas as well. This is also verified in the case of Demosthenes’s father, who maintained two large craft workshops, one producing swords and another, producing beds. Demosthenes’s father employed 32 slaves in his sword workshop and another 22 in his bed workshop (Demosthenes, Against Aphobus I, 1.9.10). Moreover, Demosthenes tells us that his father’s investment in the two craft businesses was valued at about 6.5T, the value of his slaves was 4T, and the value of equipment and raw materials, 2.5T. His total fortune was estimated at 15T, being cash, financial investments and his house and furniture (Demosthenes, Against Aphobus, 1, 27.9–11). 15T was a great amount of money, equal to 90,000 drachmae. According to Aeschines (Ag. Tim., 1.97), another example is Timarchus who employed 12 slaves in his leather works. The richest Athenian in the second half of the fifth century, the statesman and general Nicias, owned 1,000 slaves and hired them out to a mining contractor at one obol per day. Hipponicus, too, had 600 slaves rented out in the same way, and Philemonides, 300 (Xenophon, W.M., 4.14– 15). The orator Lysias, a metic, together with his brother, Polemarchus, employed 120 slaves in a fifth-century workshop producing shields (Lysias, Ag. Er., 19). In the market of Athens and the port of Piraeus, anyone could find most, if not all, of the goods available on the international market of the time. Imported products could be sold on the spot and exported directly to final destination markets. The port of Piraeus had become an international entrepôt of antiquity, as was Alexandria later in the Hellenistic period, Amsterdam and London in the seventeenth century and Amsterdam, Rotterdam, Shanghai and Hong Kong and many others today. Pseudo-Xenophon (Con., 2.7) argues that: Whatever were objects of gratification in Italy or Cyprus or Egypt or Lydia or Pontus or Peloponnesus or anywhere else, were all gathered together in this one place on account of Athens’ control of the seas. Andreades (1933), based on Xenophon (W.M., 6), argues that the exceptionally favorable geographic position of Piraeus made this port the very center of the Greek world. In the Classical period, Athens was the greatest market in the Mediterranean world, the one that attracted every merchant who wanted to sell a large cargo quickly at a good price (Bresson 2016b, 414). The importance of that

114  The Athenian Market maritime trade to the rise and economic development of the city-state of Athens had been understood by the ancient Greek philosophers, as can be seen from the surviving texts of ancient Greek literature. Ober (1978) provides a comprehensive record of all this evidence. Xenophon (Hellenica, 7.1.3–5) implies that a large part of Athenians were economically dependent on sea-related activity. The transport of goods by sea was very extensive. Gradually, an “international” merchant class was created handling commercial activity. It involved not only members of the well-to-do aristocratic class but also metics and many foreigners who lived in the polis temporarily, as traders. Foreigners could freely participate in the commercial activity in Athens, providing that they paid in advance the so-called xenikon tax (Demosthenes, Against Euboulides, 57.34). This tax was imposed on them because although they were not Athenian citizens, they made use of the Athenian state’s infrastructure to benefit financially and create wealth. Thus, the xenikon tax, in effect, served as compensation to the state for granting authorization to non-Athenians to practice commercial activity in Athens for profit. Xenophon (W.M., 6.1) was advocating the establishment of laws friendly to merchants so that the Athenian economy could benefit from increased revenues from tariffs. The merchant class consisted of two main categories, the emporoi and naukleroi. Because ancient interpretations regarding the exact duties of these two professions vary, there is a considerable disagreement among historians regarding their true nature. For a large part of the literature, both emporoi and naukleroi were primarily traders whose main source of income was generated by selling or exchanging goods for profit. Naukleroi were merchants who were affluent enough to own their vessel(s), often captaining them as well (Cohen 1973, 56), while emporoi were merchants who chartered merchant ships from a third party. However, in a recent study, Woolmer (2015) argues that naukleroi were not independent traders but rather haulers or agents who worked for, or in partnership with someone else, transporting goods for a third party. By contrast, emporoi were independent professional merchants whose income was generated by direct trade and who, if wealthy enough to own a vessel, which was rare, acted as shipping agents. Both emporoi and naukleroi could be poor or wealthy, either slaves, free citizens, metics or foreigners. The literature offers at least one case of a naukleros being also a slave – Lampis, belonging to Dion. Casson (1971, 314–315) and Woolmer (2015, 159) do not accept naukleros as having been the captain of a cargo ship, as another designation exists for that profession: kybernetes.5 In this view, their primary duties centered on logistics, ensuring that commodities were shipped safely and in good order to their intended destination (ibid, 160). Therefore, being a captain on a merchant ship was not an exclusive privilege of free citizens alone. Based on Aristophanes (Wealth, 1155), Xenophon (Mem., 3.7.6), Plato (Rep., 2.371c–d), Kallet (2007, 80) and Woolmer (2015, 155–156), we can distinguish five categories of traders and merchants:

• Autopoles – sold goods produced by himself. • Kapelos – bought goods from the autopoles, then sold them within the local area. Female vendors known as kapelis are attested as well.

The Athenian Market  115

• Emporos – traded goods from abroad, far from where they were purchased or produced.

• Palinkapelos – a trader who bought from an emporos, reselling the goods within the vicinity.

• Metaboleus – a retailer or peddler who sold goods in very small quantities within a limited region of operation.

The Athenian state, recognizing the lucrative prospects of public revenues from commercial traffic, introduced taxation measures. As Woolmer (2016, 70) argues, based on Andocides (M., 1.133–4), before the outbreak of the Peloponnesian War, the standard Athenian tax on trade had been levied at 1% ad valorem, a rate that remained unchanged until 413 BCE when Athens implemented an emergency 5% tax on all maritime trade conducted in all harbors of the Athenian Alliance. However, at the beginning of the fourth century, the pentecoste (fiftieth) was introduced, a customs duty of 2% on the value of goods imported and exported from the port of Piraeus. Pentecoste remained in use until the Roman period. The collection of taxes in favor of the state through the pentecoste was assigned to private consortiums, selected for this purpose through open competition, another paradigm of 3P, as was the trierarchy. These tax collectors were called pentecostologoi (Migeotte 2009, 50–51; Johnstone 2011, 55). According to Thucydides (2.3), in the port of Piraeus, there was a specific office known as teloneion (customs office) where custom duties were levied on imported goods. Before entering the Athenian agora, imported products were stored in large warehouses and sheds, as happens in today’s customs offices. Thucydides adds that, in the time of Pericles, there were five large warehouses in Piraeus, called stoai, where the “authorities of the port” were housed: the telones or telonarches, the epimelitai tou emporiou, the sitophylakes and others. According to Andocides (M., 1.133–4), he was assigned himself a state contract to perform pentecoste during 402/401 BCE. The proceeds of the contract were 36 silver talents, and Andocides complained that he made a little profit on the transaction (only six talents). Through this information we can estimate the whole of Athens’ import and export trade, including transit trade, that year (which was one of the worst in the history of Athens). It must have been worth more than 1,800 talents, which is equal to more than 11 million drachmae, an undeniably large sum of money. This information proves the very large volume of transactions and the robustness of the Athenian economy (even though there was somewhat of an economic recession that year), even if, due to lack of cliometric data, a clear picture from available macroeconomic figures is not possible. It is also important to emphasize Athenian economy’s extroversion, evidenced with the creation of a unified commercial area between Athens and its allied city-states as well as other states in the East Mediterranean that proved extremely beneficial for the entire region’s further economic development. Athenian merchants were active even in distant lands. They established trade delegations in those lands and could perform long-distance trade transactions, operating through their commercial agent(s) on-site (Johnstone 2011, 22; Bresson 2016a, b; Harris 2016; Woolmer 2016; Bitros et al. 2020).

116  The Athenian Market For example, an Athenian banker could give an order to his commercial agent in Syracuse by sending him an official request via an official document, posted by sea, to buy merchandise in Syracuse or Marseille. Then the merchandise was transferred to Athens to be bought by the customer of the Athenian banker upon receipt of the cargo at Athens. Isocrates (Trapeziticus, 35) informs us that an Athenian banker could even sign an official document to one of his clients and then the client could receive payment with that document in another city-state from a collaborator of that particular Athenian banker there. Schaps (2022, 247) adds that, in this way, the Athenian banker’s client could save the risk and expense of transporting a large volume of coins with him for a transaction he performed (e.g., selling of goods) in Athens. These descriptions denote very advanced banking services for the era. Of course, the Athenian merchants and bankers and their associates throughout the Mediterranean or the Black Sea and Asia Minor did not have the phenomenal ease of today’s high technology to handle international transactions, for example, buying products from Amazon, paying bills through their bank accounts via the internet or using ATMs and even digital currencies (bitcoin, etc.). But what matters is the existence of a set of financial institutions and mechanisms, such as banking and insurance services, even in a simpler form relative to today, as will be seen in detail in the next chapter. 5.5.  Neosoikoi, Philon’s Arsenal and the Athenian Long Walls Immediately after the end of the Greco-Persian Wars, construction of the new fortifications of Athens began, on the recommendation of Themistocles to address the possibility of a new invasion. Within a short period, a 6.5 km long wall was built surrounding the city of Athens, which was named the Themistocleios, after its inspirer. Its base was made of stone and the rest, of large bricks. As Thucydides (1.93–4) observed, as soon as Themistocles turned the focus of the Athenians from the city to the port of Piraeus, and as soon as he began the fortification of the port (years before the Persian invasion), “he straightway contributed to founding the (Athenian) Empire.” These fortifications connected Athens with Piraeus as a “twin” city. These walls, known also as the Long Walls, were destroyed by the Spartans in 404 BCE after Athens was defeated in the Peloponnesian War and rebuilt again during the Corinthian War (395–387 BCE). They provided the city-state with a constant link to the sea and prevented it from being besieged by land alone. Parts of the walls are preserved to this day at various points along Piraeus’s shores. Fourth century Piraeus, apart from being a busy port, was probably the first, or one of the first cities in the world where urban planning priorities were also taken into account. The city’s layout featured a grid plan and included a large central market. The plans were drawn up by the famous “architect-urban planner” Hippodamos, who separated and demarcated the public spaces and sanctuaries harmoniously. According to the spatial planning specifications, the port hosted a large number of neosoikoi, buildings designed for safekeeping triremes when they were

The Athenian Market  117 not operating at sea, such as during the winter and also for repairs. These were huge hangars covered by a pitched roof. At the back, the neosoikos was protected by a wall (Image 5.3). In the center of the largest harbor of Piraeus (Kantharos) was the (international) marketplace Emporion, as well as the Deigma (meaning sample), a place where samples of goods for sale were on exhibit. Importers, for the most part, exhibited their goods publicly (Demosthenes, Ag. Lac., 35.29, 35.35; Xenophon, Hellenica 5.1.21; Burke 1992, 204; Bresson 2016a, 309–312). Anyone could come to see the products on display before buying. The Deigma in Piraeus, in effect, could be seen perhaps as the first-ever world expo, such as those of today in the world’s many large commercial centers – Shanghai (China), Dubai (UAE), Yeosu (South Korea), etc. Xenophon in Ways and Means (3.1–2) verifies the existence of neosoikoi. He writes: I shall now say something of the unrivalled amenities and advantages of our city as a commercial centre. In the first place, I presume, she possesses the finest and safest accommodation for shipping, since vessels can anchor here and ride safe at their moorings in spite of bad weather. There was also a special marketplace, the Makra Stoa (Long Portico), dedicated to the import and sale of grain. Apart from the main commercial harbor, Kantharos, there were two smaller ones, Zea and Mounichia, also functioning as naval bases for the Athenian triremes. There a scattering of even smaller harbors existed as well, through which goods were smuggled in to avoid customs duties.

Image 5.3  Neosoikos (a trireme’s hangar). Source: Image prepared by the author.

118  The Athenian Market O’ Halloran (2018, 14, 217) argues that the neosoikoi installations were extensive enough to host almost 400 triremes. The cost of building them reached 250T. The construction of the neosoikoi in the fifth century cost 1,000T, an enormous sum (6 million drachmae). At the end of the Peloponnesian War, they were demolished at the demand of the Spartans, only to be rebuilt 50 years later. Between 330–325 BCE, 372 neosoikoi were built or renovated according to naval inventories (Migeotte 2009, 112). It has been estimated that Piraeus, in its 372 neosoikoi in its three harbors, could accommodate 82 triremes in Mounichia, 196 in Zea and 94 in Kantharos O’ Halloran (2018, 14, 217) further argues that the total cost for the infrastructure of Piraeus’s harbors reached 2,100T. In addition to the cost of the neosoikoi, this included the city walls of Athens and Piraeus (19 km), with a cost of 950T, the Long Walls connecting the two cities (12 km), with a cost of 600T, and the Phaleric wall (6 km), costing 300T. By any measure, there is no doubt that these sums totaled a significant amount of money. For any neosoikos to be useful, it had to ensure the easy lifting and launching of the ship by its crew, without additional assistance. For this reason, the neosoikos had floors made of wood smeared with fat, allowing the keel of the boat to slide easily. Each trireme had its assigned neosoikos. This means that the exit of a trireme from a neosoikos was an easy procedure. The quick launch of a warship in case of danger minimized the possibility of the Athenian fleet suffering a catastrophe from a possible surprise enemy attack, like what happened with the traumatic case of Aigos Potamoi. For that purpose, the crews of the triremes lived near the neosoikoi to be able to man their ship immediately in case of need. Kyriazis (2009) and Van Wees (2013, 13) argue that the state was the largest employer in Athens and probably in all of Greece. They mean that the thetes, who comprised a large portion of Athens’ workforce, should be seen as public employees, as they were paid by the state. There were no operations during the winter, so an 8-month service of a trireme (240 days) would cost about 48,000–50,000 drachmae, calculated at 200 drachmae per day. Because a trireme had 170 thetes, during a peaceful year or period, even if only 20 triremes were on active-duty at a minimum, the annual cost of thetes’ wages was very high: 170 x 20 x 240 = 816,000 drachmae, or 816,000/6,000 = 136T, a large amount. That’s why van Wees notes that the public naval dockyards in Piraeus, with their hundreds of state-owned warships in constant need of maintenance, must have been the largest enterprise in the country, as was true of the naval dockyards of early modern Europe. A trireme had a displacement of 50 tons. In the Classical period, a merchant ship with an average carrying capacity exceeded 100 tons, with some inscriptions alluding to ships displacing 165 or even 320 tons as quite common. During the Hellenistic period, the displacement of ships reached even 500 tons. According to Kron (2016, 360), this evidence corroborates that ancient maritime trade was as highly developed as it was during the time of the great trading states of the Renaissance and the eighteenth century AD. Casson (1971) writes that the famous Syracusia, the largest cargo and passenger ship in antiquity, designed by Archimedes and built

The Athenian Market  119 around 240 BCE, could carry a cargo of some 1,600 to 1,800 tons and a capacity of 1,942 passengers. Even if the construction of Syracusia is an exceptional case, there is no doubt that such dramatic increases in the displacement on commercial ships must have been accompanied also by significant technological changes and progresses in their shipbuilding. And there is no doubt that technological change in the ancient Greek maritime industry of the times went hand in hand with the rise of international commerce and economic growth. Such a nexus has been persuasively described by Schumpeter (1928, 1934) for modern economies, and I believe that it also applies regarding the Athenian economy in Classical times. ​ One of the most emblematic buildings in Piraeus was the so-called Philon’s Arsenal or Philon’s Storehouse. Philon was an Athenian architect of the fourth century, known as the architect of two important works: the portico of twelve Doric columns to the great Hall of the Mysteries at Eleusis and, during the administration of Lycurgus, the arsenal in Athens. Regarding the latter, it was a majestic building of 124 x 17 meters, intended for the storage of the triremes’ equipment, their movable parts and accessories. In winter, the ships were dragged inside the neosoikoi where they remained sheltered while their movable parts were removed and stored in the arsenal. Construction began in 346 BCE, and the building was completed in 328. This huge naval depot housed sails, ropes, oars, ladders, awnings – all kinds of ship accessories – offering shelter from inclement weather when the ships were not active, especially in winter when navigation was impossible (Gabrielsen 2014; Sherwood et al. 2020, 309–310). The arsenal had been erected by using public funds, and any Athenian citizen was free to visit it and observe the perfect condition and maintenance of the equipment of their city’s ships, which functioned also as an indirect proof of the good management of public funds. ​ In conclusion, with the markets of Athens and Piraeus, combined with the markets of city-states of the Athenian Alliance in the Aegean, the Eastern Mediterranean and the Black Sea, a large, unified network – a maritime ecosystem

Image 5.4  Artistic impression of a merchant ship of the Classical period. Source: Image prepared by the author.

120  The Athenian Market

Image 5.5  Philon’s arsenal (artistic impression). Source: Image prepared by the author.

– for interstate trade, military cooperation and cultural interchange had emerged (O’ Halloran 2018; Economou et. al. 2021a, b; Halkos et al. 2021).6 The city-state of Athens had evolved, in a way, into a distinctive “democratic empire.” Athens of the Classical period, more or less, achieved what resembles the international role of the United States amongst its allies during the Cold War and even today. The USA is the most powerful country and democracy in the world, having achieved this by relying on its qualitatively superior constitutional organization features.7 One can easily speculate that the agora, with its vast variety of goods, would have also had an indirect positive psychological effect on Athenians regarding the power of their polis. A city that trades a vast amount of goods would be considered as a “cosmopolis-metropolis.” In times of peace, Athenian citizens probably would have been characterized – on average, at least – by an appetite for life, as evidenced in Aristophanes’s comedies, which reflect the cheerful character of Athenian social life. This is because they could enjoy security (internal through eunomia and the rule of law and external through naval military power) and economic growth but also because they were active participants in various pleasures of everyday life, for example, the purchase of an edible good among the vast array of goods on offer or participation in the plethora of social events at hand – banquets, theatrical performances, etc. 5.6 The Ancient Greek Philosophers on International Trade Theory As has already been argued, the economic prosperity of Athens in the fourth century should be largely attributed to the operation of the port of Piraeus. This is confirmed by authors such as Thucydides (2.38) who claimed that the naval force of Athens relied on both the warships and the merchant ships and writes that:

The Athenian Market  121 We have this farther by the greatness of our city that all things from all parts of the earth are imported hither, whereby we no less familiarly enjoy the commodities of all other nations than our own. In line with Thucydides’s view, the importance of the port in the economic activity of Athens is confirmed by various sources; below is another one from Isocrates (Panegyricus, 4.42) in which he proudly states that there was no good produced anywhere in the world one could not find in the marketplace of Piraeus: Again, since the different populations did not in any case possess a country that was self-sufficing, each lacking in some things and producing others in excess of their needs, and since they were greatly at a loss where they should dispose of their surplus and whence they should import what they lacked, in these difficulties also our city came to the rescue; for she established the Piraeus as a market in the center of Hellas – a market of such abundance that the articles which it is difficult to get, one here, one there, from the rest of the world, all these it is easy to procure from Athens. 5.6.1 Transactional Cost Reductions and the Logic of Comparative Advantage

With the same logic, Plato (Pol., 2.371c–d) writes that performing transactions through the market economizes time. This is consistent with the modern axiom of transactional cost reduction. Characteristically, on this, Xenophon (W.M., 3.1–3, 3.12–13) writes: Still, the number of our trading partners would increase considerably and our commerce would be much more amicable if rewards were offered to any member of the port authority who settled disputes equitably and quickly, so as not to delay the merchant eager to depart. Plato (Rep., 2.370e–2.371a) further argues in favor of the necessity of international commercial exchanges. Speaking with his brother Adeimantus of Collytus he explains that commerce covers the consumers’ demand for various goods and that “it is practically impossible to establish the city in a region where it will not need imports” (Bresson 2022, 233). All cities had to export and import, even those that were very traditional and mostly oriented toward self-consumption, such as Sparta. Pseudo-Xenophon (Con., 2.11–12) explains why international commerce is mutually beneficial between various parties: Wealth they alone of the Greeks and non-Greeks are capable of possessing. If some city is rich in ship-timber, where will it distribute it without the consent of the rulers of the sea? Again if some city is rich in iron, copper, or flax, where will it distribute without the consent of the rulers of the sea? However, it is from these very things that I have my ships: timber from one place, iron from another, copper from another, flax from another, wax from

122  The Athenian Market another…yet no other city has even two of these things: the same city does not have timber and flax, but wherever there is flax in abundance, the land is smooth and timberless. There is not even copper and iron from the same city, not any two or three other things in a single city, but there is one product here and another there. Similar descriptions and views can also be found elsewhere, in Plato (Rep., 2.373d– e), Polybius (4.38.9) and Aristotle (Pol., 1.1257a.35). It would not have been an exaggeration if one argues that these ancient descriptions could be linked, to some extent, to the theoretical foundations of David Ricardo’s theory of comparative advantage. Regarding this concept Krugman et al. (2018, Chapter 3) add that states engage in international trade because nations, like individuals, can benefit from their differences by reaching an arrangement in which each side produces what it does relatively well. And this is something that, more or less, can also be extracted as an interpretation by the above passage. Xenophon’s view presents a great semantic affinity with the following passage from the Wealth of Nations by Adam Smith: What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage. The general industry of the country, being always in proportion to the capital which employs it, will not therby be diminished… but only left to find out the way in which it can be employed with the greatest advantage. ([1776], 1977, Book IV: 2) The Athenians managed to create an environment that allowed them access to all products from all over the known world. It is clear from what the ancient philosophers quoted above that this commercially oriented strategy was considered to be beneficial, at least for the majority of Athenians. Krugman et al. (2018) argue that the fundamental reason trade potentially benefits a country is that it is always possible to redistribute income in such a way that everyone gains from trade. Samuelson (1962) adds that trade is beneficial because it enlarges an economy’s choices. These principles have an intertemporal character that also applies to the case of Classical Athens. After all, the above ancient philosophers were actually describing the daily commercial practices in Athenian society. From the above overall analysis one can extract ancient Greek commercial practices that reflect some of the key principles of modern international trade theory, as presented in Table 5.2 below. In the Athenian market, the role of buyer and seller could be played by everyone – citizens, metics, slaves, foreign merchants and women. There was no discrimination between buyers and sellers, and the main element for a successful transaction was the intermediation of money. This meant that barter exchanges

The Athenian Market  123 Table 5.2 Modern international trade principles that can be found in the Athenian economy The exchange of goods and services is important for economic development. International markets are important for economic cooperation between countries. Exchange of goods and services should take place with the intermediation of money not barter. Reducing or even eliminating transaction costs is a key principle in conducting international trade efficiently. No country can produce everything. Autarky is almost impossible to be achieved; thus, trade and imports are also important in satisfying a nation’s needs. Each country specializes in the production of products for which it has the proper productive means and sufficient amount of experience. Trust is important between trading parties. Source: Krugman et al. (2018).

had probably been only a small part of commercial transactions as a whole (on this, see Chapter 7). Buying and selling also involved price bargaining, abetted by a variety of assists: facial expressions, gestures, changes in the tone of voice and other tricks of the trade (Johnstone 2011, 22). Therefore, product prices were not fixed but were, by definition, negotiable between buyers and sellers under the broader reasoning that applies today – that prices are determined by the forces of supply and demand. 5.6.2 Market Specialization and the Issue of Technological Innovations

Following the evidence already presented, this section offers further proof regarding the issue of market specialization in the Athenian market. An important element that confirms the advanced nature of the Athenian market is its segmentation into a vast array of various submarkets, e.g., concerning vegetables, cheese, tanning, stonemasons, banking services, etc. Specialization of markets was advanced by Xenophon (Cyr., 8.2.5). The specialized character of the market was also highlighted in the Republic in the discussion between Socrates and Adeimantus, in which Plato writes of the benefits of what today are characterized as i) market specialization and ii) division of labor. In the Republic (2.369b–2.370a and, more specifically, 2.370c–d) Plato writes: “The result, then, is that more things are produced, and better and more easily when one man performs one task according to his nature, at the right moment, and at leisure from other occupations (emphasis by the author).” “By all means.” “Then, Adeimantus, we need more than four citizens for the provision of the things we have mentioned. For the farmer, it appears, will not make his own plough if it is to be a good one, nor his hoe, nor his other agricultural implements, nor will the builder, who also needs many; and similarly the weaver and cobbler.”

124  The Athenian Market In the Republic (4.433a) he similarly adds: each one man must perform one social service in the state for which his nature is best adapted. In accordance with the views of Xenophon in Oeconomicus and Cyropaedia, Aristotle in Politics (1.1255b) also refers to the crucial role of placing the right people in the right job positions: the master’s science is the science of employing slaves – for the master’s function consists not in acquiring slaves but in employing them. This science however is one of no particular importance or dignity: the master must know how to direct the tasks which the slave must know how to execute. Therefore all people rich enough to be able to avoid personal trouble have a steward who takes this office, while they themselves engage in politics or philosophy. The science of acquiring slaves is different both from their ownership and their direction – that is, the just acquiring of slaves, which is akin to the art of war or that of the chase. Let this then stand as our definition of slave and master. I believe that Adam Smith, Frederick Taylor, famous theorists of division of labor and labor specialization (with the aim of faster production, lower production costs, greater efficiency and greater profits), as well as Henry Ford, who implemented these ideas into practice, would have very much enjoyed reading the above views of Plato. Thus, in this respect, Plato and Xenophon were the first authors, historically, to deal with the relationship between labor specialization and productivity. To this point, I further expand the above analysis by focusing on the hoplite equipment market. In Section 5.4, there was a reference to Pasion who had an aspidopoieion (shield-manufacturing workshop) employing 60 workers. Another successful businessman, Cephalus from Syracuse, also specialized in the same business in Athens, by having a large workshop employing 120 workers (slaves). His sons, Lysias and Polemarchus, continued his business activities. Usually, the owner’s house was located close to his business (Lysias, Against Aphobus I, 27.9; Jew 2022, 208). I also refer again to Demosthenes’s father who employed 32 slaves in his sword workshop and another 22 in his bed workshop (Demosthenes, Against Aphobus I, 1.9.10). Another businessman, Pantainetos, seems to have had about 30 slaves employed in processing ore (Demosthenes, Against Pantaenetus, 37.4). Migeotte (2009, 96) writes that most of these ergasteria (workshops) employed either freemen or slaves, usually chosen on the basis of family links or dependence on the master. Free and slave workers frequently performed the same tasks. Ergasteria were often handed down from father to son, and a number of such cases, such as artists and sculptors, are known. Acton (2014, 28), who has focused on manufacturing during Greek antiquity, and Jew (2022, 209) argue that except the large ergasteria such as those described above in major cities such as Athens, Corinth, Syracuse, Alexandria and Hellenistic

The Athenian Market  125 Antioch, there were also others of smaller size and smaller workforce capacity. Jew further provides an estimation that most of these ergasteria were limited to a size of two to six members, and for him, this is the reason why ergasteria could not expand through vertical integration and reach the larger sizes common after the Industrial Revolution. Almost every one of these ancient workshops had a supervisor – that is, a slave assigned to supervise and guide the other slaves through the production process while also being responsible for their care and feeding (Aeschines, Against Timarchus, 97; Amemiya 2007, 97; Acton 2014). Of course, it is well-known that such a post, the superintendent, proved to be important regarding the success of the factory organization production procedures during the Industrial Revolution of 1760 onward. Demosthenes’s father produced only swords. Other producers focused on helmets, spears, arrows, bows, armor, etc. Xenophon (Mem., 3.10.9–10) mentions the case of Pistias, who was famous for the quality of the armor produced in his factory. Acton (2014, 142) characterizes such production facilities as “concentrated industry,” denoting market specialization. Each of these Athenian ergasteria8 specialized in specific products, should they be it armor, shields or swords. Perhaps this was related to the nature of the product itself; according to Acton (p. 137), body armor was bespoke, per the buyer’s specific measurements, and in response to particular orders. As it is very well-known today, market specialization and targeted production, if implemented wisely, could be successful and profitable as business strategies. Such practices can increase productivity through “learning by doing” which, if achieved, can eliminate diminishing returns in aggregate output, as Arrow (1962) argued. Modern examples of firms which specialize in specific sectors of production, includes, among many others, Sikorsky Aircraft (since 2015 a subsidiary of Lockheed Martin), an aircraft company which, in the late 1930s, decided to focus on military and other purpose helicopters; Pratt & Whitney (a subsidiary of Raytheon Technologies), which focuses on the production of aircraft engines only; Miele and AEG that focus only on electric appliances; Volkswagen AG, which for 2022 was the world’s largest automobile manufacturer, which focuses only on the production of related products, such as automobiles and vehicles; or the CocaCola Company, which produces nonalcoholic beverage concentrates, etc. These paradigms of modern multinational companies serve only to illustrate the argument regarding market specialization. Any comparison between ancient ergasteria and modern firms is not possible due to a variety of critical (or even chaotic) differences, especially regarding the volume of production and the technological complexity of modern products compared to those of ancient times. But if one carefully reads Xenophon’s Oeconomicus and Ways and Means, as well as the findings of Acton (2014, 2016), he/she can easily understand that some basic aspects of entrepreneurial strategies that are related to modern concepts, such as profit maximization, market specialization and labor motivation, were known to the ancient Greek entrepreneurs and applied by them in practice, to a greater or a lesser extent.

126  The Athenian Market Another interesting issue regarding Pistias’s manufacturing facility mentioned above is that the products it produced were was more expensive in comparison to those of other ergasteria. This was related to market forces dynamics. Because Pistias’s products were in high demand, the production in his ergasterion could be boosted to an extent to meet increasing demand, but overall output could not exceed a specific level of output – at least, in the short run. This means that perhaps Pistias’s production could not satisfy increasing demand from hoplites for his armor in the short run. Under basic microeconomic theory logic, this could be interpreted as a shift in the demand curve to the right (movement from demand curve D1 to D2 in Figure 5.2). Another three possible reasons Pistias’s products were more expensive than those of the competition are: i) that the raw materials used were of better quality, thus, more expensive, affecting the final price of the product; ii) that Pistias’s staff was highly trained, producing better quality products and, thus, able to demand higher wages, which again was reflected in the final price of the product. One could argue that the majority of the staff, or even all the staff, was comprised of slaves who could not demand a wage increase, even if they deserved it. In that case, one turns to iii), the issue of cost increases so as to train the slave-staff to acquire skills superior to those in competitors’ ergasteria. Another element that must be considered in this discussion is Acton’s (2016, 161) competitive advantage view. He argues that the great expertise that some of these ergasteria developed created conditions of product differentiation and

S1

P2

P1

D2

D1 Q1

Q2

Figure 5.2  A shift of the demand curve in Pistias’s factory.

The Athenian Market  127 branding. Due to the nature of some manufacturing activities, the supply of purely identical products from competing ergasteria was not entirely possible. According to Acton, the construction of each shield demanded six to eight people and three working days to produce. I believe that this is an indication that each ergasterion actually left its own mark regarding the products it produced. This means that the hoplite equipment, although was the same for everyone, it was not as qualitatively homogeneous in the sense that the more affluent hoplites could buy better quality equipment from the more qualified and more expensive ergasteria. Such a view, which is plausible, is supported by Hall (2013, 15) who argues that because of this, in practice, the hoplites with the best quality armament were selected for the front rows of the phalanx, while the hoplites with the slightly “inferior” armament were placed in the rear rows. Perhaps, some ergasteria may have even tried to innovate by setting up new methods of production to produce military equipment at a lower cost and by introducing technological improvements on them under Schumpeter’s (1934, 1939) logic. Thus, the better the quality of a product, the greater the demand for it, and, perhaps, this element provides a persuasive explanation concerning why there were price differences among similar products. Another diastasis in this discussion is the possibility that the Pistias’s armor was more preferable by the hoplites because it was indirectly linked, to a great extent, to their personal prestige, as buying from Pistias’s ergasterion was a sign of economic affluence. Only well-off hoplites could buy from him. What is described here resembles, to some extent, to a specific market logic used today, such as women’s with handbags. Only well-off women can afford to acquire expensive handbags from famous houses such as Gucci, Louis Vuitton or Christian Dior. Another aspect in this discussion is that that any technological innovation in Classical Athens, seen under a Schumpeterian perspective, could provide only a temporal technological advantage to an ergasterion because, as happens today, the other ergasteria would lose customers and profitability and would then try to either develop an analogous technological breakthrough or, if that was not possible, to try to copy or even steal this superior technological patent to increase their profits and regain or even expand their market share. In other words, I believe there was always the possibility of some kind of reverse engineering process9 followed by some of Pistias’s competitor ergasteria. Imagine, for example, Ergasterion A, which has managed to develop a superior iron alloy that provided better armor to the hoplites in the phalanx or to the marines on the triremes. Ergasterion A also sells this new and superior armor at a lower price than the other ergasteria, say Ergasteria B, C, D and E. It is obvious then that Ergasterion A would increase its market share and profit. For their part, the other ergasteria might try to develop a similar technology to regain their market share. If unsuccessful, the alternative is to try to copy the technology of Ergasterion A by stealing it. How could this happen? By simply sending an employee from their ergasteria (or just recruiting someone who could act as customer of Ergasterion A) to purchase the new armor in order to copy it. Another possibility is that they might try to bribe one or more of the key employees Ergasterion A to reveal the

128  The Athenian Market technological breakthrough. Of course, this is related to what is now known as commercial or industrial espionage.10 This is an intertemporal practice. For example, Harris (1998) describes the rivalry which existed between Great Britain and France in eighteenth-century Europe and the methods used by France to obtain the skilled manpower and technology that had given Britain the edge – particularly in the new coal-based technologies. Another characteristic paradigm is analyzed by Glitz and Meyersson (2020) who found that the industrial espionage practices provided by East German informants in the West over the period 1970–1989, led to a significant narrowing of sectoral total factor productivity gaps between West and East Germany. Another notorious case includes the 2007 Formula 1 espionage controversy, also known as Spygate; a set of accusations among Formula 1 racing teams that confidential technical information had been passed between them. This involved three competing racing teams: McLaren, Ferrari and Renault F1. What is today’s known as industrial espionage was also quite a common practice in Ancient Greece. For example, in 500 BCE, in the Mediterranean city of Sybaris (in today’s Southern Italy), chefs presiding over luxurious feasts complained of rivals stealing their recipes. According to Athenaeus (Deipnosophistae XII 521c2–d7), the city’s authorities granted cooks exclusive ownership of their recipes for one year, creating perhaps the oldest known recognition of intellectual property rights through patents. Such a right didn’t do just that. By shutting out potential commercial competitors for an entire year, it offered the possibility of greater profits to those who produced innovative products. I presume that J.A. Schumpeter would enjoy knowing this ancient Greek practice. This is related, to some extent, to a key Schumpeterian thesis that temporal monopolistic profits should be considered legitimate as part of a process in which the ultimate goal will be to give incentives to producers to innovate by improving their methods of production through profit-making and, ultimately, to provide qualitatively superior products in the market (Schumpeter 1934, 1942). ​ Richmond (1998) describes various cases of espionage in Ancient Greece. To face this phenomenon, some states such as Sparta, took excessive measures: all foreigners were expelled. Rhodes, during the period of its naval supremacy in Hellenistic times, was so security conscious, that death was the penalty for spying or trespassing onto the dockyards (p. 7). Far from the unorthodox practices of “industrial” espionage and reverse engineering, there is also a more practical explanation as to why any technological advantage that a specific ergasterion could develop could not last forever. This has to do with the fact that those working in the ergasteria could exchange secrets regarding their skill and knowledge as a part of a wider socializing procedure within the polis. For example, in modern times, Saxenian (1994) vividly described how diffusion of technical knowledge can take place in the United States by comparing two high-technology industrial districts, California’s Silicon Valley and Boston’s Route 128. He, among others, writes that: Every year there was some place, the Wagon Wheel, Chez Yvonne, Rickey’s, the Roundhouse, where members of this esoteric fraternity, the young men

The Athenian Market  129

Industrial spices (presented as cycles) from other ergasteria act as customers of Ergasterion A regarding hoplite armor

Ergasterion A sells products to every citizenhoplite

Industrial spies intend to purchase armor from Ergasterion A so as to copy and steal its technological breakthroughs

Ergasterion A cannot deny the sale of a product to every citizenhoplite. It faces also information asymmetry since it cannot define the true nature behind the motives of each separate customer who wishes to buy hoplite equipment

Figure 5.3  Technological innovations and economic espionage in the agora of Athens.

and women of the semiconductor industry, would head after work to have a drink and gossip and trade war stories about phase jitters, phantom circuits, bubble memories, pulse trains, bounceless contacts, burst modes, leapfrog tests, p-n junctions, sleeping sickness modes, slow-death episodes, RAMs, NAKs, MOSes, PCMs, PROMs, PROM blowers, PROM blasters, and teramagnitudes. Eminent economist Alfred Marshall wrote on this issue of diffusion of technology: The mysteries of the trade become no mystery, but are as it were in the air… Good work is rightly appreciated, inventions and improvements in machinery, in processes and the general organization of the business have their merits promptly discussed: If one man starts a new idea, it is taken up by others and combined with suggestions of their own; and thus it becomes the source of further new ideas. (Marshall 1920, 271) I believe that a similar situation, as described above by Marshall and Saxenian, was also the case in Classical Athens because of the very high degree of social networking and dissemination of ideas that was taking place in the Athenian agora and the polis as a whole, as convincingly Manville and Ober (2003) and Ober (2008) explain. Finally, further evidence that these ergasteria were motivated by profit is that they held stocks of raw materials as well as of products to be sold in the future.

130  The Athenian Market Evidence of this is provided by Lysias (Ag. Er., 12.19), who writes that when the Thirty Tyrants requisitioned Cephalus’s factory during a spell of hostilities, they found 700 shields stored there. This ergasterion occupied 120 slaves as workers. A similar case involved Demosthenes’s father’s factory. When he died, it was found to have a large stock of raw materials – iron, bronze and other materials – hoarded by the greedy guardians of his children (Demosthenes, Against Aphobus I, 27.9). There is no doubt that these two cases illustrate an intertemporal practice; any entrepreneur aiming at long-term continuous production of goods for profit ensures that a sufficient supply of raw material is at hand. Thus, he invests in equipment and raw materials in advance so that production is not interrupted in the future; furthermore, he trains his staff accordingly. This is what today is characterized as capital accumulation and development of know-how. As a final comment, to avoid any mistaken assessment and being criticized of historical anachronism, I will simply characterize this hoplite equipment market as a special market which resembles an oligopoly according to a modern definition. 5.7 Trade and the Athenian Institutions behind International Commercial Treaties From the evidence already provided, it has already become obvious that territorial expansion, increases in population movements, colonization (in Magna Graecia and throughout the Mediterranean, Asia Minor and the Crimea) and innovations in transport led to a significant rise in the volume of trade from the Archaic to the Classical and Hellenistic periods. Goods such as foodstuffs, raw materials, wine, olives and pottery as well as manufactured goods were freely circulated by merchants throughout the Mediterranean. In Greece and the wider Aegean, local, regional and international trade exchanges are recorded as early as the Minoan and Mycenaean times, during the Bronze Age (1600–1100 BCE). The earliest written sources of Homer and Hesiod attest to the existence of emporia (trade posts) and emporoi (merchants) from the eighth century BCE onward. Osborne (1996) provides tangible evidence that independent markets had already existed in Ancient Greece since at least the Archaic period regarding various products such as pottery, while Izdebski et al. (2020) have found that in Archaic and Classical Greece, farmers’ decisions on production and distribution were driven by demand for exports throughout the Hellenic world. Interstate alliances, the spread of coinage and the gradual standardization of measurements as well as safer seas, following a determination to eradicate piracy through the Athenian Alliance all contributed to the impressive rise in the volume of trade during the Classical and the Hellenistic periods. Traded Greek goods included, among others, cereals, wine, olives, fish, cheese, figs, eels, honey, meat (from sheep, goats, etc.), tools, fine pottery, perfumes, etc. Goods available in the Greek marketplaces of major urban centers imported from abroad included, among others, grains and salted fish from the Black Sea (principally via Byzantium), lumber (especially for shipbuilding), textiles, glass, papyrus, luxury food items such

The Athenian Market  131 as spices (e.g., pepper), as well as slaves from Egypt, Illyria (Albania), Colchis (Georgia), Syria, etc. To boost trade, Greek city-states signed commercial treaties with each other. These treaties were bilateral agreements between city-states that ensured that traders would have reciprocal legal rights in these city-states. About 20 such agreements between Athens and its allies and other cities have been recorded, and there are examples referring to many other city-states as well. These treaties became effective through the institutions of proxeny, enktesis, asylia, isopoliteia, asphaleia and symbola. According to Lyttkens (2013, 124), proxeny was introduced as a measure for traders who travelled between Greek poleis, or other places in the ancient world, to protect them from the risk of having themselves or their property seized. Aside from the danger of confronting bandits and pirates, there was always the risk of being a trader (say Trader A) engaged in a legal dispute with another trader (say Trader B) in a foreign polis (say Polis B). In this case, Trader B was backed by local law, leaving Trader A exposed and unprotected. To solve this problem, which was detrimental to trade, a polis could appoint a citizen of another polis to act as proxenos, a kind of ambassador; for example, an Athenian citizen could host citizens or merchants etc. from Sparta at his own expense, in return, receiving honorary titles from Sparta. Alcibiades and Cimon characteristically were the proxenoi of the Spartans in Athens and acted as hosts to them. Thus, proxenoi were citizens of one city-state who were recognized officially as “friends” and representatives of another (Plato, Laws, 642b; Demosthenes, Against Callipus, 52.5, 52.9; On the Crown, 18.82). A proxenos acted as an intermediary, protector and patron to the foreigner (Migeotte 2009, 153–154). Thus, a proxenos served in his homeland as a conduit of the city-state he represented. He used whatever influence he had in his own city-state to promote policies of friendship or alliance with the city-state he voluntarily represented. Proxeny, thus, was an institutional arrangement that exemplifies the extrovert character of the Athenian economy and that of a plethora of other Greek poleis toward the rise of maritime trade networks in the Aegean and elsewhere during the Classical period. Burke (1992, 205–206) and Mack (2015) analyze in detail this institution. Proxeny first appeared during the Archaic period, but it was further developed over time. This institution was the forerunner of modern diplomatic relations between states. The status of proxeny was awarded by public decree, upon a probouleuma (proposed legislation) submitted to and debated over by the Athenian Assembly. Regarding enktesis, to encourage capable foreign merchants to establish commercial activity in Athens, the Athenian authorities could reward property rights to own land and house to those foreigners who had specialized knowledge in trade and, by their activity in the city, had benefited the Athenian economy for many years (Βurke 1992, 208–209, 2010, 397; Engen 2010, 192–197; Woolmer 2016, 74, 79–83). Other rewards included front seats in the theater and the right to pay visits occasionally at the Prytaneion to dine or entertain themselves. This way, traders would be willing to come to Athens not only for profit but also in the hope of receiving such honors (Canevaro 2018). Engen (2010, 276–325) identifies nine

132  The Athenian Market honorary decrees awarded for trade reasons before the 350s BCE, and 24 between 350 and 320. Another internationally oriented institution that proved beneficial for promoting trade among poleis was asylia, which meant exemption from reprisals that, for example, Polis X could take against Polis Y, if the actions of a citizen or a group of citizens of Polis Y damaged the interests of Polis X (Economou and Kyriazis 2019b). In other words, with asylia, the practice of sylis, meaning the legal implementation of reprisals against another polis, was not ethically and legally justified. According to Mackil (2013), Economou (2020) and Saba (2020, 221–237), asylia agreements assured freedom from seizure between the states involved. This provision was very important, as it essentially removed any kind of retaliation against any criminal, moral, etc. act that occurred. It was a very important institution, as it rendered ethically and practically invalid the concept of collective responsibility of all inhabitants of a polis for the actions of specific persons that originated from it (Economou and Kyriazis 2019b; Economou 2020). Another key institution was that of isopoliteia, developed mainly during the Hellenistic period, according to which states agreed on treaties of mutual citizenship rights. This happened through either mutual agreement between states or the exchange of individual decrees. It was used to improve and cement amicable diplomatic relations (Saba 2020). There are many examples of this, such as a pact between Miletus and Cyzicus (poleis in Asia Minor) from approximately 330 BCE which cemented their friendship. On other occasions, these treaties were of limited duration and had to be renewed, such as a treaty between Miletus and Pygela (a polis in Asia Minor) at the end of the fourth century BCE, which renewed the isopoliteia between them. A colony could also be granted isopoliteia vis-à-vis its mother city-state. Based on an isopoliteia treaty, citizens could enjoy the privileges of citizenship in all member cities of the treaty. In practice, this meant that they were entitled to reap benefits such as exemption from taxation, the right to participate in the public cults, special seats at public gatherings and the right to argue lawsuits in court. Under isopoliteia, any citizen of one state who wanted to obtain full citizenship – especially to acquire eligibility for public office in another state – had only to acknowledge liability to taxation by that state. Mackil (2013, 102) characterizes isopoliteia as “full citizenship, available to any individual who chose to domicile himself in another region.” Asylia and isopoliteia institutional arrangements contributed to better conditions for cooperation, commercial activity and property rights protection between persons within the borders of a federation or between persons whose city-state authorities had signed decrees of mutual (interstate) citizenship agreements with other city-states. Isopoliteia took a plethora of different forms; they could be signed between every city-state or federal state around the known Greek world which accepted such institutions. Isopoliteia agreements were mandatory between all member city-states within a federation state. This is, for example, the case of the Aetolian League signing an isopoliteia agreement of equal status with Messene, a city-state in southwestern Peloponnesus (Mackil 2013, 102, 263). In Economou (2020, 20,

The Athenian Market  133 58, 132–133), I argued that at the peak of its expansion in 191 BCE and beyond, the Achaean League comprised more than 103 city-states. All these had to establish isopoliteia, proxeny, enktesis and asylia agreements with each other. Regarding asphaleia, it was related to bilateral agreements which ensured the safe transfer of people and products (mostly by sea) and the prohibition to seize their property (Müller 2016, 8; Harris and Lewis 2016). To create a safe unified “open seas” economic–commercial environment between the members of the Athenian Alliance, the Athenians introduced maritime patrols conducted by triremes to guarantee the safety of allied cargo traffic within the territory of the Alliance’s borders (Cohen 1992; Ober 2008). It would not perhaps be an exaggeration to claim that asphaleia could be seen as a progenitor of what, in the eighteenth century and later, was established as laissez faire et laissez passer values. Finally, symbola (singular: symbolon) were permanent bilateral treaties, introduced during the fifth century BCE, created to regulate litigation between citizens of different states providing each party with a form of protection that was similar to asylia (Woolmer 2016, 82). The purpose of symbola was to allow citizens of one state to gain access to the legal system in another (Bresson 2016a, 51–54). This was essential to interstate trade. It was important that, in the course of commercial activity, the stay of an Athenian citizen in another state (whether allied or not) and vice versa be backed up by legal coverage in the event of legal disputes arising between say, an Athenian and a local merchant. For this to be achieved, through symbola, Athens opened its courts to citizens of other states through dikai emporikai, nautodikai and xenodikai and vice versa. Because of the reciprocal character of these agreements, judgments obtained in one state were also enforced in the other (Müller 2016, 8). Symbola typically referred to interstate agreements dealing with legal relations between individuals originating from different states or between a state and an individual. To those travelling abroad, symbola offered protection from sylis and other forms of harassment. The Athenians and their allies established a system of international justice with a view to protect commercial activity and make it thrive. These six types of institutions became very common and further evolved during the Hellenistic period concerning the ancient Greek federal states such as the Achaean, the Aetolian and the Boeotian.11 According to Woolmer (2016, 82), symbola agreements were an indication that the Athenians were conscious of the need to regulate the thriving markets of Athens. Bresson (2016a, 52, ftn. 23) agrees with Woolmer. He also writes (p. 62) that Finley (1973, 161) oversimplifies when he interprets Aristotle’s (Pol., 2.9.7) synthekai peri to eisagogimon only as “treaties about imports.” For Finley, foreign trade’s sole aim was achieving self-sufficiency. But Bresson (2016a, 52, ftn. 23) correctly notes that, naturally, this cannot imply in any way that one should ignore exports because there can be no imports without exports. Symbola are mentioned by Thucydides (1.77), Andocides (Against Alcibiades, 4.18) and Demosthenes (Against Meidias, 21.173). Recorded inscriptions of symbola are listed in Table 5.3. Finley (1973) and Hasebroek ([1933], 1965, 142) argued further that symbola agreements should not be considered as true commercial treaties but as

134  The Athenian Market Table 5.3 Recorded inscriptions of symbola Symbola In the fifth century IG I³ 6 40–44 IG I³ 10 IG IX,1² 3:717 IG I³ 127 17–18 In the 4th century IG II² 46, 1–3 and 36–39 IG II² 144 1.8–17 IG II² 207 Α.1.12–13 and Β.1.9 IG II² 466, Β.1.32–35 IG II² 778, 10–14, IG II² 111, 73–75

Type of Bilateral Agreements between States Athens with another unspecified city-state Athens and Phaselis (Asia Minor) Legal aid agreement between neighboring city-states. Agreement between Athens and the island of Samos Athens and Troezen Athens and the island of Naxos Athens and the satrap Orontes (Asia Minor) Athens and the island of Tinos Athens and the Boeotoians Athens and Kios

heterogeneous commercial agreements – a result of Athens exercising its (imperial) power over her allies. Hasebroek (p. 141) writes that all commercial treaties that have come down to us from pre-Hellenistic times are concerned not with commercial advantages but with the supply of corn and other indispensable commodities, including materials for defense and for shipbuilding. Hasebroek (p. 141) then mentions another “heterogeneous” commercial agreement in 423/422 between Athens and the Kingdom of Macedon during the reign of King Perdiccas concerning the sale of wood for the production of oars. These views of Finley and Hasebroek should be treated very cautiously because they actually consist their interpretation on specific historical and archaeological evidence. After all, during the fourth century BCE, dikai emporikai apparently took over some of the functions of symbola. And there is no doubt that dikai emporikai ensured fair justice for every party, whether Athenian or not, and were administered by specialized judges. From the overall series of evidence in Chapters 4 and 5, it is obvious that the Athenians realized that establishing an efficient and fair system of justice for all (citizens, metics, foreigners) was to their advantage, as this increased the wealth and prosperity of their polis as a whole. Fair justice for all, whether Athenians or not, proved beneficial for the city-state by contributing to making the Athenian economy the strongest of the era, and assured, for Piraeus, the place as the international entrepôt during Classical times. Relative to the above is the issue of what today is characterized as economic freedoms. Bergh and Lyttkens (2014) studied the degree of economic freedom that the Athenians practiced during the Classical period, based on a modern evaluation method, the Economic Freedom of the World Index issued by the Fraser Institute. They focused on:

• Size of government – expenditures, taxes and enterprise. • Legal structure and security of property rights. • Access to sound money.

The Athenian Market  135

• Freedom to trade internationally. • Regulation of credit, labor and business. They found that the level of economic freedom in Classical Athens can be compared with that of the highest ranked economies of today, such as contemporary Hong Kong and Singapore. Bitros et al. (2020, 149–151) reached similar results by comparing economic freedoms in combination with the quality of governance in those same case studies. Table 5.4 gathers together the main political and economic institutions through which the Athenian spirit of interstate cooperation was practiced and “exported” to the rest of the member-states of the Athenian Alliance during its First (478–431 BCE) and Second (378–355 BCE) phases. To a greater or lesser extent, the majority of these states shared the same principles and implemented the same geopolitical and economic institutions as Athens, just as, today, the USA and its allies do, through NATO, USMCA (formerly NAFTA), ASEAN and other relative international treaties. Table 5.4 The politico-economic institutions of Athens as the leader of the Athenian Alliance Political and Economic Institutions/Agreements Democratic institutions Direct participation of all citizens in decision-making through the popular Assembly and other administrative institutions. Interstate relations Cooperation between the city-states of the alliance in a variety of political and economic issues. Common justice Cooperation and adoption of a common set of rules regarding practices “international justice” between the allied city-states such as symbola, dikai emporikai, nautodikai and xenodikai. Proxeny A proxenos acted as a kind of ambassador. The post was related to interstate trade but not only this. Enktesis The right of holding land property, granted as a privilege or reward to foreigners. Asylia Exemption from reprisals that, for example, City A could take against City B. Isopoliteia Treaties of equal citizenship rights between the poleis of Classical and Hellenistic Greece. Asphaleia Agreements which ensured the safe transfer of people and products (mostly by sea) and the prohibition of seizing their property. Free trade area Free movement of an extended range of goods and services between Athens and her allies. Economic freedoms Economic freedoms in Classical Athens were on a level similar to that of the highest ranked economies of today, such as contemporary Hong Kong and Singapore. Property rights Property rights protection was secured in Athens during both protection the Classical and the Hellenistic periods (508–31 BCE). Commercial contracts Commercial contracts were protected at the interstate level protection with bilateral agreements such as symbola. Common currency area See Section 7.7.

136  The Athenian Market 5.8 The Athenian Philosophers’ Beliefs Regarding Entrepreneurship, Labor Productivity and Division of Labor Many of the Athenian philosophers who dealt with and described economic issues were people who were, in fact, participating in practice in the commercial activities in the agora. Thus, in essence, their views were not just theoretical ideas regarding how the market should work, but, more importantly, they described how it worked in practice. Bitros and Karayiannis (2008) argue that the Athenians had incorporated a system of incentives into the institutional framework of their economy to encourage the development of entrepreneurship so that the production of goods and services could be carried out in a socially responsible manner. Of course, the success of entrepreneurship in general is directly linked to work effort by the employees. Even in the oldest surviving ancient Greek texts of the Archaic period, the importance of being an industrious man is praised, while idleness is strongly criticized (Hesiod, Works and Days, among others, 330ff). After all, the Athenians worshipped the Athena Ergane, the “industrious Athena” (Pausanias, Description of Greece, 24.3). Of course, it is true that some philosophers, Aristotle, for example (Pol., 1278a8), considered some kinds of work, such as those related to crafts, as banausic, meaning harmful to body and soul (Migeotte 2009, 31). The majority of citizens, however, did not distinguish between noble and menial undertakings. Furthermore, some influential men, such as Isocrates (Areopagiticus, 24, 44) and the Sophists, stressed that all labor of free citizens must be regarded as an honorable activity. Aristotle (Pol., 1257a.1–5, 1257b.1–12) also recognized that the more experienced someone is in performing market activities (chrematistike), the more profit he can achieve. Aristotle also understood the necessity for a man to achieve a harmonious relationship between work and free time because this is related to happiness, and happiness seems to depend on leisure. He wrote that we work to enjoy schole (leisure) “just as we make war to enjoy peace” (Arist., Nic. Eth., 1177b). Equally important, he emphasized the distinction between schole and aergia (idleness). Not only idleness but also wasteful life was condemned by Athenian society. For example, most of the Athenian writers railed against those wealthy citizens who simply spent their wealth prodigally, living in the lap of luxury or who mismanaged their households (Demosthenes, F. Ph., 42; Aeschines, Ag. Tim., 30, 42, 105). Reading Xenophon’s Oeconomicus (Oec., 1.8–9, 2.11–12, 3.1.3, 4.1, 9.11, 12.3, 12.10–11, 12.16–19, 21.10–11), one will quickly understand that this work is not just a useful guidebook to household management. It is also concerned with the entrepreneurial aspect of a household, as, among others, the general managerial principles it describes cover a wider spectrum of practical codes of behavior and attitudes regarding the entrepreneurial mentality of the Athenians as a whole. The work contains valuable insights still relevant today.12 Rather than presenting an average oikos, Xenophon presents us with one of the wealthy families, one which also functioned as a small enterprise because, in addition to the owner’s family, it hosted slaves as personnel, had animals and produced goods for either self-consumption

The Athenian Market  137 within the household itself or for selling them in the market for making a profit. Thus, the household owners could also be seen as small entrepreneurs. Xenophon writes that a capable oikonomos (household manager) could be either the head of the household himself or an epistates (caretaker of the household) employed by him. This manager had to possess some very specific aptitudes and have knowledge and experience on the subject of his work. He had to have superior organizational skills and be able to manage the household budget to end the year with profit (Xen. Oec., 20.21). Aristotle (Oec., 1344b.20–30, 1345b.5–12) expressed similar views. Xenophon believed that the basic elements of success for managing a household were: i) specialized knowledge, ii) personal capability, iii) diligence, iv) efficient stocking of goods and v) efficient oikos production organization. Xenophon (Oec., 3.1.3) further argues that the household manager had to behave honorably toward his labor force, including slaves, encouraging his personnel to increase their productivity by personal example with his own actions characterized by diligence and honesty. He primarily had to effectively coordinate all the production means of the household (workforce e.g., using a plow, hoe and shovel). The household manager should also reward hard work. By achieving this, fair competition among the workforce could be achieved. Securing and training high-quality personnel were, therefore, key factors in the growth of small enterprises such as the Athenian households. Modern theory also conveys the need for a good and friendly working environment as a way of increasing the productivity of the employees. Effective human resource management enables employees to contribute in a productive way to the overall company’s goals and objectives. Xenophon (Oec., 13.10) adds that the oikonomos13 should ensure that employees have the appropriate means to do their work, such as clothes and shoes. He added that not everyone should earn the same, but the most productive workers should be rewarded with the best means to do their job properly (13.10). Xenophon further gives us a clear idea that he understood in depth the importance of rewarding the most productive workers because this was related to their productivity: it is very disheartening to good servants, Socrates, when they see that they do all the work, and others who are not willing to work hard and run risks when need be, get the same as they. For my part, then, I don’t choose to put the deserving on a level with the worthless, and when I know that my bailiffs have distributed the best things to the most deserving, I commend them; and if I see that flattery or any other futile service wins special favor, I don’t overlook it, but reprove the bailiff14, and try to show him, Socrates, that such favoritism is not even in his own interest. (13.10–12). In particular, each worker had to be rewarded according to his productive contribution, compensating the one who works more efficiently in practice more than the one(s) with inferior performance. If this is lacking, there will be dissatisfaction among good and efficient employees, affecting their motivation and diligence.

138  The Athenian Market In other words, in the event of equal treatment between highly and less productive workers, a situation of injustice and favoritism is created. Similar views were expressed by both Aristotle (Oec., 1344a.28–35, 1344b.15–20) and Aristophanes (Wealth, 505, 525–530). The latter wrote that equal distribution of wealth between individuals will weaken the will of those individuals to boost their work effort, thus, weakening the division of labor that relies on the different skill sets of people. Rewarding employees as a motive to increase their productivity is an axiom that is fully accepted by modern Organizational Theory. For example, in the seminal work of Maslow’s (1943) hierarchy of needs, human needs such as self-esteem, confidence, acknowledgment of achievement, respect and access to resources such as food, water, sleep, etc. are considered as a top priority for an employee to be productive. Maslow argues that for an organization to function efficiently, it needs the three main components of a reward system: compensation, benefits and recognition. These values are described as prerequisites in Xenophon’s Oeconomicus if one considers it as a whole. According to Xenophon (Oec., 4.1), the oikonomos in a household must choose the most productive laborers or slave-workers and distribute them among the various job positions based on their skills and qualifications. Here, Xenophon proves that he had a good notion of what Adam Smith ([1776], 1977, I, 1.17–18), the founder of modern economics, and Frederick W. Taylor, the founder of scientific management, supports to be the division of labor and labor specialization.15 I believe that Xenophon could not have written the following without the benefit of some factual observations regarding how the economy of his time functioned in practice: Now it is impossible that a single man working at a dozen crafts can do them all well (emphasis added by the author); but in the great cities, owing to the wide demand for each particular thing, a single craft will suffice for a means of livelihood, and often enough even a single department of that; there are shoe-makers who will only make sandals for men and others only for women. Or one artisan will get his living merely by stitching shoes, another by cutting them out, a third by shaping the upper leathers, and a fourth will do nothing but fit the parts together. Necessarily the man who spends all his time and trouble on the smallest task will do that task the best (emphasis added by the author). The arts of the household must follow the same law. If one and the same servant makes the bed, spreads the table, kneads the dough, and cooks the various dishes, the master must take things as they come, there is no help for it. But when there is work enough for one man to boil the pot, and another to roast the meat, and a third to stew the fish, and a fourth to fry it, while someone else must bake the bread, and not all of it either, for the loaves must be of different kinds, and it will be quite enough if the baker can serve up one kind to perfection – it is obvious, I think, that in this way a far higher standard of excellence will be attained in every branch of the work. (emphasis added by the author) (Xenophon, Cyr., 8.2.5)

The Athenian Market  139 Xenophon wrote Cyropaedia in 370 BCE. Figueira (2012, 683) is quite confident that Adam Smith reached his key insight that division of labor is determined by the extent of the market by reading Xenophon (Cyr., 8.2.5–8.6.8). Plato (Rep., 2.369 B–C) also singles out the division of labor, arguing that it was a key reason for the development of the poleis. The principle of division of labor derives from the different inclinations and skills of people. He writes: The origin of the city…is to be found in the fact that we do not severally suffice for our own needs, but each of us lacks many things…As a result of this, then, one man calling in another for one service and another for another (emphasis added by author), we, being in need of many things, gather many into one place of abode as associates and helpers, and to this dwelling together we give the name city or state. (see also Laws, 846 D–E) Similar views by Plato are provided also in (Rep., 1.333b–c). Vivenza (2001, 126– 140) argues that Plato’s views regarding the division of labor also greatly impacted what Adam Smith proposed in his seminal work, The Wealth of Nations.16 The general impression one gets from the analysis, so far, is that, in principle, the Athenian entrepreneurial spirit did not allow any discrimination regarding free citizens, metics or slaves. Freed men and slaves could become, subject to certain conditions, even managers in a business, once they were properly trained by their masters for this purpose. Also, it seems that, in principle, the criteria for choosing workers and their distribution among the various job positions were decided based on work efficiency, honesty, knowledge and capability. Before closing this section, I focus on two more points. Xenophon (Oec., 1.3–4) mentions that the role of the manager in a household could be undertaken by a salaried employee. According to Xenophon, this is feasible because someone who efficiently manages his own household affairs acquires relevant experience, allowing him to offer his managerial skills for a fee to a household (or business) of another. We have tangible evidence of this. Pasion, a former slave who became a freed man and a famous banker, due to old age, handed over the management of his bank to his trusted slave, Phormion, until his own son, Apollodorus, became of age. In turn, the latter later handed over the management of the bank enterprise to four managers (Glotz, [1926], 2013). This offers clear evidence that, in Classical Athens, the modern agency theory also applied, at least to some degree, in which the owner of a business is not necessarily its manager. In modern firms, multinational companies and big business groups, there is a distinction between the owners/shareholders and the manager(s) of a business, such as a CEO. As Adam Smith ([1776], 1977) noted, the interests of a company’s shareholders do not necessarily coincide with those of its manager(s). This may lead to the so-called principal–agent problem. Another aspect practiced in Classical Athens had to do with the possibility of renting a business that was already in operation. In other words, it was possible to lease an already functioning business (e.g., a bank, ergasterion, etc.). This is mentioned by Demosthenes (F. Ph., 36.5–6, 36.36–38; Against Pantaenetus, 37.4–7,

140  The Athenian Market 37.29). Unfortunately, there are no additional references in the literature on this that would provide us with a more detailed view of how this worked in practice. I believe leasing a business, if it really was taking place, was a rare practice. Such an arrangement, to be beneficial to the lessor, implies that he would be able to achieve a profit, including covering the cost of leasing the business. Otherwise, there would have been no reason for undertaking such an activity. As a final comment, throughout this chapter, various aspects of institutions, commercial practices and Athenian philosophers’ views regarding commerce were analyzed. As Bresson (2014, 47) writes, until one generation ago, the prevailing orthodoxy was that Ancient Greece was still assumed to have been a place where i) the society was dominated by an elite of wealthy landowners, living in towns and exploiting a poor rural countryside where people lived in crass poverty; ii) trade existed, but it was considered as limited in extent, as it was supposed to supply almost exclusively luxury goods for the elites; iii) financial operations remained primitive and have consisted mainly of the usurious practices of private lenders; iv) the lack of productivity was conceived to originate from the lack of technical progress, itself rooted in the lack of interest of the elites in any kind of investment in research. These views resonate with Finleyan orthodoxy. I believe that, at this point, it is necessary to offer two remarks that refute the above views. First, regarding the issue of usurious practices of wealthy landowners, such a view implies some affinity with the concept of conspicuous leisure as defined by Veblen (1899) in his Theory of the Leisure Class, in which he argued that, during the medieval ages, the wealthy leisure class exploited the lower income classes, such as the peasants and serfs. Due to space limitations, this issue cannot be examined further here. Perhaps a situation which falls into the above category may also have occurred in the Classical period as well, to some extent. But, if we exclude the exploitation of slaves, what cannot be denied is that the impressive rise of the Athenian merchant class during that era was based on income, a significant part of which was not produced by exploitation. This means that traders and entrepreneurs, as producers of products, either Athenian citizens, or metics, such as autopoles, kapelos, emporos, palinkapelos and metaboleus, as defined in Section 5.4, generated a significant portion of income for themselves and the economy in general via their personal work effort (Halkos and Kyriazis 2010). These groups were very active in the market. Their motivation was making a profit by exploiting various market opportunities. Furthermore Kallet (2007, 76) argues that an important phenomenon can be observed in the case of Classical Athens: citizens, metics and slaves often worked side by side at the same task, with the same skills. For example, in the construction of the Erechtheium, slaves, metics and citizens worked together on the project as masons. What is also of great importance in terms of social justice is that they were all paid the same. Free men and slaves, working together and getting paid the same, would have been unthinkable in any Eastern empire of that time or in the feudal organization of the Middle Ages.

The Athenian Market  141 In Section 9.1, I provide the latest findings by scholars in the field who argue that economic growth was significant and took place not only during the Classical but also the Hellenistic period of Athens and Greece. Economic theory regarding modern economies argues that economic growth cannot be achieved in the long run if the economy is not characterized by labor productivity, at least to some extent (Krugman 1997). By also making a synthesis of information from this and the following chapters, I believe that this finding applies also to the case of Classical Athens. 5.9 The Agricultural Sector and Husbandry Agricultural land was protected by law like any other kind of property. Bresson (2007, 2016a, 199–128) and Kallet (2007, 74) argue that the ancient Greek economy should be included in what is called a “Mediterranean trilogy” which combines the cultivation of sitos (cereals), olives and vines with livestock, especially sheep and goats. Cereals represented the largest portion of the Greek diet. According to Fachard and Bresson (2022, 106–107) the climate during the Classical times was slightly wetter and cooler than today, yet not different enough to picture significant changes in terms of crops and vegetation. They further argue that agricultural surfaces in Attica and the Aegean were limited, typically averaging 20%–40% of a landscape essentially dominated by mountains and rocky hills. Agricultural production was concentrated in a few valleys, plains and dolines. Cultivated areas could be increased by erecting terrace walls on slopes and by draining marshy areas. These operations required a significant investment in labor. Izdebski et al. (2020), using empirical data, studied vegetation changes from 1000 to 600 BCE in Ancient Greece and found that, in a period of apparent population growth in Southern Greece, production of cereals decreased, and the production of olives and wine increased. As argued in Section 5.3, there were chronic shortages of cereals, essential to feeding the population. Cohen (1992, 6) argues that by the fourth century, agricultural products were sold by their producers for profit making. A plethora of agricultural products were cultivated in the fertile Greek soil – figs, grapes, pears, turnips, apples, honey, chickpeas, myrtle fruits, etc. (Harris 2002). The Athenians generally had three annual harvests. The first was in spring, the second in summer and a third in early autumn (Xen. Oec., 14.11–15). Regarding husbandry, goats and sheep were the most common livestock, offering meat, wool and milk (usually in the form of cheese). Pork and poultry were also raised. Oxen were rare and normally used as work animals, although they were occasionally sacrificed at altars. Donkeys and mules were raised as pack or draught animals. Labor in agriculture and farming was based on a dual labor supply system: it was either paid, in terms of a workforce of free citizens, or based on the use of slaves, or a combination of both (Migeotte 2009, 86). Aristophanes (Wasps, 712), for example, specifically mentions paid laborers picking olives. The key element of agriculture in Ancient Greece was that it had to deal with a very uncertain climatic environment, such as lack of rainfall or excessive and catastrophic rainfall in spring or early summer. An extreme cold snap in winter

142  The Athenian Market could destroy the grain seeds. To avoid a possible total economic loss of a year’s production because of, for example, bad weather conditions, Greek farmers followed a strategy of cultivating various species to reduce uncertainty. In addition to cereals, oil, wine, vegetables and some honeycombs were produced to minimize the danger of completely losing any specific crop. Producing “a little of everything” is something that Bresson (2016a, 159) characterizes as a “rational strategy for limiting uncertainty.” Kallet (2007, 74) accepts such a view. A related practice was that each farmer took care not to have all his holdings concentrated within a specific geographical location but to present at least some geographical dispersion. To a degree, such a dispersal strategy might have been the result of land inheritance or dowry (Bresson 2016a, 160). As has already been mentioned, during the Classical period, the household itself not only produced products for self-consumption and storage but also for sale in Attica’s markets (Van Wees 2013, 12). Households could sell their surplus and purchase products they lacked or were in deficit or did not produce at all. Osborne (1991, 133–155) believes that in fourth-century Athens, there was a high degree of monetization and a well-developed market for both agricultural and manufactured goods raised for sale. Agricultural production was based on smallholdings (Morris 2002; Kallet 2007, 74). Hanson (1995) analyzed the important contribution of small farmers to agrarian production. Bresson adds that land property in the Greek city-states of the times was much more fairly distributed in comparison to the economies of the Eastern world.17 This is because the farm buildings that have been excavated so far indicate mid-size farms, and these may have been characteristic of Attica in the fourth century. And unlike the kingdoms of the Eastern Mediterranean, peasants in most Greek cities of the Classical and even in the Hellenistic period were free landowners; thus, they had an incentive to produce more and better-quality goods because this was directly connected to their personal income. Regarding land productivity, Bresson (2016a, 164) argues that this increased gradually from the pre-Classical to the Classical period. This does not contradict the fact that the reality in Attica was that a considerable portion of the land was in the hands of the wealthy minority who introduced specialized production in unified large areas. Intensified agricultural techniques and occasional investment in land were also characteristic of the time. Demosthenes (Against Phaenippus) describes the large landholdings of one such owner, Phaenippus. Wealthy owners had groups of plots operating as a single unit, scattered throughout the territory of Attica and beyond (Foxhall 2002). All of these wealthy men made use of slaves or low-income citizens as a workforce. For example, a citizen with the name Aristophanes (not the playwright) held land totaling 27 hectares (Lysias, On the Property of Aristophanes, 19.29). Another case has to do with the above-mentioned property of Phaenippus (Demosthenes, Against Phaenippus, 42). Historians’ views regarding the extent of Phaenippus’s holdings vary between 300–390 and 180–400 hectares (Bresson 2016a, 147). In any event, his holdings were vast. Cimon also held a lot of property (Arist., Ath. Const., 27.3). Lysias (On the Olive Stump, 7.4, 7.9–10) refers to issues of land

The Athenian Market  143 Table 5.5 Distribution of land ownership in Attica Categories

Landowners

Land in Hectares

Total Number of Hectares

Percentage of the Athenian Population

Percentage of Private Land Property

A B C D TOTAL

5,000 11,000 8,000 1,200 25,000

0 0.9 4.5 18.2 23.6

0 9,900 36,000 21,600 67,500

20 43.5 31.5 5 100%

0 15 53 32 100%

Source: Bresson (2016a, 144).

sales. Wealthy Athenians, such as Pericles, could even appoint a person of trust to undertake the proper management of their households (Bresson 2016a, 160). Pericles obviously preferred dedicating most of his time to politics. The state and the treasury-temples throughout Attica also owned large tracts of land. Table 5.5 provides an estimation regarding land distribution in Attica just after the Peloponnesian War period, based on Bresson (2016a, 144). Column 1 shows the land capacity of the Athenian citizens in hectares (1 hectare is equal to 10,000 square meters). Bresson estimates that 25,200 citizens (out of approximately 30,000) held land, categorizing them into four categories. Table 5.5 shows that 5,000 Athenian citizens actually held no land property. A further 11,000 Athenians (Category B) held land that totaled 9,900 hectares, another 8,000 had property totaling 36,000 hectares, while 1,200 had holdings of 21,600 hectares. Bresson argues that Attica’s territorial extent totaled 2,400 square kilometers, of which 33% consisted of agrarian land. Bresson notes that landowners, and especially those of the Categories A and B, belonged to the hoplite class (Hanson 1995). A large portion of citizens, mainly such as the thetes, did not hold land or held only a small parcel of land; thus, they had to find other ways to make a living (Bresson 2016a, 144). Some very rich Athenians who owned large land areas could lease land to tenants. 5.10 The Socio-economic Status of Women Many scholars tend to downplay the achievements of the Athenian democratic regime because of a certain level of discrimination against women and slaves, as evidenced, for instance, in denying women the right to vote. However, such a discussion will not be on the right theoretical basis if it does not take into account the different historical and social contexts between then and now. If democracy means the indirect political participation of all adults in decision-making, then democracy must be seen as a modern phenomenon. But if by democracy one means the direct participation of citizens in the commons, even if excluding women, then it is a purely ancient political phenomenon. Universal suffrage for women in modern societies began in New Zealand in 1893. In Europe, it was first introduced in Finland in 1907, Norway in 1913, Denmark in 1915, the Netherlands and the USSR in 1917, the United Kingdom in

144  The Athenian Market 1918 and Germany, Austria, Czechoslovakia, Hungary and South Africa in 1919. In 1920, it was introduced in the USA, 1921 in Poland and Sweden, 1931 in Spain and Canada and Switzerland after WWII. In modern Greece, women voted for the first time in 1956. If the ancient Greek democratic city-states cannot be considered as having been democracies because women, slaves and metics were deprived of political and some key civil rights, then by implication, this means that the USA, for example, where the state and the constitution officially existed since 1787, there was no democracy until 1865, because the southern states continued to exploit black slaves, something that was abolished after the Civil War of 1861–1865, or that democracy still did not exist in the US until 1920 or in the United Kingdom until 1918 (even though Parliament has been operating in England non-stop since 1688, after the Glorious Revolution), because until then, women did not have suffrage rights to vote. That, of course, is misleading. Thus, a general conclusion is that democracy, both ancient and modern, presents some discrepancies. But to denounce their statutory institutions as undemocratic because they do not correspond to some modern crucial criteria, however glaring, does not correspond to reality. According to Taylor (2017), women, together with children, metics and slaves, constituted about 80% of the population in Classical Athens. Based on the available evidence, Pomeroy (1995, 58), who has worked diligently on the status of women in Ancient Greece, observes that some historians insist that the position of women was very restrictive, while others argue otherwise. Older authors such as Wright (1923) argued that Attic wives were treated badly and kept in “oriental seclusion” by their husbands. Of course, such a view is a gross exaggeration. Other authors such as Gomme (1925) attacked that notion of oriental seclusion and argued that Attic wives could come and go freely from their homes and were held in the highest possible regard by their husbands. These diametrically different views remain prevalent to the present day. For example, Pritchard (2014), more or less, tends to support the restrictive position of women, while Schaps (1979), Pomeroy (1995), Cohen (2000), Dillon (2002) and Economou and Kyriazis (2019b) have found not so restrictive societal attitudes against women. Some researchers even talk about misogyny to characterize the status quo in Ancient Greece in describing how men treated women in practice, something that is misleading and, in various cases, the product of a restrictive and biased ideological prism. In this section, due to space limitations, all this argumentation cannot be retrieved and presented, nor can a detailed analysis be provided regarding the economic and political status of women. The focus here is on some very characteristic societal aspects regarding their property, social and economic rights. The same applies regarding the economic and political status of slaves, analyzed in the next section. Only key, relative evidence on the issue is reproduced here. To begin with, a woman, apart from not having political rights, could not be represented in court alone but had to be accompanied by her father or her brother, if she was single. If she was married, her husband, known as kyrios,18 acted for her. If she was a widow, her eldest son acted for her. However, the testimony of

The Athenian Market  145 women was accepted by the courts. On the other hand, women and girls also played significant roles in other areas, such as religion, in which their roles in the success of festivals such as the Panathenaia, Anthesteria, Thesmophoria and Apatouria was very important (Cohen 2000; Dillon 2002). The marriage age of women ranged between 15–18 years, while that of men ranged between 25–30. Of course, there have always been deviations from the general rule (Bresson 2007). Newlyweds received a dowry at their wedding, generally consisting of valuable utensils and money as well as real estate that the young woman’s father entrusted to his future son-in-law. Also, wives became epikleroi – that is, they controlled their husband’s property when he died in favor of their son(s) until they became adults (Schaps 1979; Garland 1998). Foxhall (2002, 212) argues that in matters of inheritance, the position of women was disadvantageous concerning bequests received by male heirs. Pomeroy (1995, 61) argues that women never truly owned their father’s property. On the other hand, ancient sources testify of so many cases of women who had secured property rights. Such information is preserved mainly from the Hellenistic period. To list some examples, Epicteta, from the island of Thera, who lived around 200 BCE, owned many properties. Another, Arete, bought a garden in Megara from another woman for 1,000 drachmae, while Timacreta owned land in the Macedonian–Greek Kingdom of Egypt during the reign of Ptolemy Euergetes etc. (Schaps 1979, 5, 12). In Sparta, women enjoyed a regime of complete equality in holding property with respect to their husbands. After all, two-fifths of the total land in Sparta was the property of women (Fleck and Hanssen 2009). In Gortyn, on Crete, which had no democracy, possession of land by women was as high as 46% at some point, while in Thessaly, one-third of the total area was owned by women. Compared to the very limited rights of women in other nations of the then known world, these instances are not at all negligible. The existence of property owned by women is also mentioned concerning the islands of Tenos and Keos. In Asia Minor, even larger property holdings of Greek women are attested, especially in the Hellenistic period (Arist., Pol., 1270a.23–5; Schaps 1979). Finally, it is worth noting that Schaps (1979, Chapter 5), offers several cases of women who had undertaken to pay off debts either of their father or of their husband. The fact that the law recognized such a right is directly linked to the issue of protection of private property, as the law recognized the right of the wife or daughterin-law to conduct lawful legal and commercial transactions on behalf of her relatives. Apart from the well-established view that the position of women was very limited, and their main concern was the management of their houses in which they were already engaged in various tasks such as weaving and caring for the upbringing of children, the ancient sources also present a different ancient Greek woman. First of all, women were considered to be citizens, even if they were deprived of the right to vote or hold a public office (Pomeroy 1995). Second, many recorded cases refer to the active and important participation of women in the commercial events of their polis, either independently or as a member of their family. Famous successful women entrepreneurs included, among others, Artemis of Piraeus, who was selling reeds as building materials, and Archippe,

146  The Athenian Market the widow of the former slave and later very wealthy man, Pasion, who introduced her to all aspects of his banking activities before he died. Archippe was then actively involved in his banking activities before and perhaps even after his death. Pasion bequeathed as personal property to Archippe the non-insignificant amount of one talent. Archippe was even involved in a legal dispute with Apollodorus, Pasion’s son, who tried to appropriate her assets amounting to 3,000 drachmae. Archippe prevailed in court. In addition, she gave 2,000 drachmae to the children of Phormion, her second husband and former slave (Cohen 2002, 110, ftn. 37). Another successful businesswoman referred to in Lysias (Against Diogeiton) was Antigone, the wife of the businessman Diodotus, who, before leaving for a war campaign, briefed Antigone about all the details of the management of his business as well as about all the important business documents. When Diodotus was killed in 410/109 BCE in a failed military operation that led to the Athenian disaster at Ephesus, Antigone proved very capable of securing her property against a wouldbe abuser, Diogenes, who happened to be her relative. After securing her property, she proved her ability by building on her husband’s work (real estate services), resulting in her property increasing by tens of thousands of drachmae (Cohen 2002, 107). In another case, a wealthy woman, Nicareta from Orchomenos, a city-state of the Boeotian League, had successively lent a respectable amount of money to the city-state of Orchomenos (10,085 drachmae and two obols). But Orchomenos was unable to repay her. This led the two parties to a legal dispute. In the end, Nicareta was vindicated by a federal court and the city-state of Orchomenos was obliged to repay its debt to her (Schaps 1979; Mackil 2013). A similar situation concerned two other women in Boeotia, Kleuedra and Olympichia. The key element for Schaps (1979, 13, 63–65) and Mackil (2013) regarding this incident was that, by law, a woman had the power to demand punishment and reparation. The incident concerning Nicareta is also noteworthy for the additional reason that it proves that members of Greek city-state who were also members of federations recognized any debt obligations redemption they had created. In other words, if a city-state failed to repay its obligations, the obligation was not waived the following year, but federal courts recognized the claim for payment either in favor of a private lender or, one can imagine, in favor of a consortium of private lenders who lent a city-state, or finally, in favor of another lender-city-state (Economou 2020). Ιn addition to women’s entrepreneurship such as in crafts, the woman-entrepreneur could also be found in retail. There are reports of women being involved in the sale of bread, beans, oats, salt, sesame, figs, processed products, clothing, perfumes, hats, women’s accessories (garlands, ribbons), musical instruments and pottery. Also, there are references to women as seamstresses, washerwomen, nurses, restaurant owners (food, wine, etc.) and even as decorators of hoplites’ helmets (painting), etc. Couples, either free or slaves, were allowed to work together, as were parents and children, such as Euxitheus who worked with his mother selling ribbons (Schaps 1979, 20, 50; Cohen 2002, 105). Ιf one was to gather together all these cases of jobs or professions occupied by women, either

The Athenian Market  147 metics or slaves, they probably involved a large portion of the female population of Athens. Thus, the view that the typical woman or wife in Classical Greece and Athens was “bound to her gynaikonites” (women’s apartments in a house) is only partially correct. And it probably refers more to the wives of the upper income class of citizens or metics. This is accepted by various authors, such as Jew (2022, 215). Of course, there did exist restrictions, such as an unmarried woman was allowed to leave her house only if accompanied by a slave, her parents, or an elderly relative. On the other hand, it is highly likely that, perhaps, a large part of the lower income women who worked in the agora had to be literate (at least to some basic extent) to participate in market activities without being exploited or cheated. In effect, women who worked for a living, in general, were not confined to their homes. For example, they were in charge of organizing and carrying out many religious ceremonies such as the Thesmophoria, collaborating as neighbors and friends (Aristophanes, Acharnians, 253; Lysistrata, 638–47); they visited each other’s homes and helped each other (Aristophanes, Lysistrata, 5–10), and they also had the right to take private walks. They could also leave their house to fetch water, to wash clothes in the rivers or lakes, to visit their relatives who were in prison (Andoc., M., 48; Lysias, Against Agoratus, 13.39–42), to go to the courts – accompanied by a male relative to gain the sympathy of the judges (Aeschines, On the False Embassy, ​​2.148, 152) – and took an active part in the preparation and events of the funerals of their family members. They even participated in the funeral orations of the polis (Thuc., 2.45, Demosthenes, Against Callicles, 55.14– 5) and were themselves often buried with honors, as the honorific stelae (steles) found in Kerameikos inform us with descriptions of such women, e.g., that they will be sorely missed, that they were smart and attentive, etc. (Cohen 2000, 45). In addition, they served as priestesses in many temples, even on the Acropolis (Herod., 8.41.3). They could also participate in women-only special religious ceremonies related to the family and fertility, thus, strengthening the bonds between them, as women, something analogous to the bonds that were developed among men during military training and participation in the phalanx formations and the triremes. For example, women could attend the festivities in the sanctuary of Demeter in the municipality of Alimos, the three-day feast of the Thesmophoria, which took place in the month of Pyanepsion (end of October) and was related to fertility (Lysias, Ag. Er., 12.19). And of course, women could interact with men without discrimination when they were in the agora of Athens or the agora of Piraeus (Vlassopoulos 2007, 42). Four other facts are important to be mentioned in this point. First, it needs no specialization in literature or poetry to note that in almost every surviving theatrical play of Sophocles, Aeschylus and Euripides, women are always present, even if in various cases they are not treated equally. Second, the female presence is also deified in the great sculptures that have survived, such as the Karyatides on the Acropolis; the Peplos Kore (around 530 BCE); the Athena Parthenos (Athena the Virgin) (around 447 BCE); the Varvakeion Athena (copy of the original from 438 BCE); and the marble grave stele of Hegeso, found in Kerameikos, Athens, from

148  The Athenian Market 410–400 BCE – all on display in the Acropolis Museum in Athens – and of course, the Aphrodite of Milos in the Louvre Museum in Paris, among many more. Third, in the Greek pantheon of the Olympian gods, there existed equality between gods and goddesses. The deities, such as Hera, Athena, Aphrodite, Demeter, Artemis and Iris had exactly the same rights, such as to speak freely or co-decide, as the gods. And there is no doubt that, over time, religion has played an important role in shaping the general perceptions and behaviors of people worldwide, including Ancient Greece. These facts completely belie the arguments about misogyny, etc. Fourth, women’s participation in sporting events, which was an interstate phenomenon deserves to be mentioned. Spears (1984), among others, mentions the Heraia athletic contests with the exclusive participation of women, which took place, like the Olympic Games, in ancient Olympia. Greek women could achieve glory through these events. It is also worth noting that women could also indirectly participate in the (male) Olympics as chariot owners, winning laurels, prestige and prizes. The first recorded winner in that capacity was the Spartan princess Cyniska, sister of King Agesilaos II, whose chariot won the tethrippon horse race in two consecutive Olympics (396 and 392 BCE). These victories are particularly significant because they highlight the concept of equality in two ways: first, a woman succeeds as an Olympian champion (in a male-dominated competition) and second, in terms of property rights: a woman owning a chariot under the same status as men. It is worth noting that the successes of Cyniska were not isolated incidents. Other Greek female chariot owners were winners in subsequent Olympics, such as Euryleonis from Sparta, in 368 BCE and Bilistiche from Macedonia, in 264, etc.19 To sum up, the position of the average Athenian woman may not have resembled the relationship of the calm Socrates with the dynamic Xanthippe, as described by Plato in Phaedo and Xenophon in the Symposium, but it certainly does not correspond to the presupposition that, in general, Athenian women were confined to the gynaikonites, without enjoying significant social participation. As a final comment, nuanced further economic analysis of gender relations is still to be made regarding Classical Athens. 5.11 The Socio-economic Status of Slaves Regarding the issue of slavery in Ancient Greece, Bresson (2014, 61–62) argues that slavery was a crucial factor in the process of growth of the ancient Greek world because it allowed massive and quick increases of the production put into the market. In the short run, it also boosted the profits of the capital holders and the process of capital accumulation. Recognizing that a substantial number of slaves were employed under arduous conditions in the silver mines at Laurion, one can argue, however, that, except for that, generally, the circumstances of slaves, as a rule, rarely reached the depths of misery. Lewis (2018) argues that although the slave systems that were introduced in the city-states of the Greek world were similar in some fundamental respects, there were still variations from polis to polis. This means that the social status of a doulos (slave) in Athens was certainly better than the circumstances of the slaves

The Athenian Market  149 of Sparta, Thessaly, or at the Roman latifundia – where revolts constantly occurred – or, for that matter, the slaves of the American South before the American Civil War (Cartledge 2002, 158). Slaves came from foreign lands, such as Illyria (today’s Albania), the modernday Balkans, Colchis (today’s Georgia), Scythia (today’s Ukraine and Southwest Russia), Syria, as well as Caria, Lydia and Black Sea coast (today’s Turkey), but some were Greeks, sold as prisoners after a war (Kyrtatas 2011, 93; Lewis 2018, 9). They cost approximately 150 to 200 drachmae on average (Xen. Mem., 2.5.2). But there were also cases in which highly skillful slaves cost much more. In 431 BCE – apart from the 40,000 citizens, their wives and children (numbering 170,000 souls) – as many as 100,000 slaves resided in Athens. Most female slaves worked in households, undertaking tasks such as cleaning and preparing food, while male slaves, for the most part, labored in agriculture (Patriquin 2015, 50). A slave in the Athenian state enjoyed a minimum level of civil rights. From inscriptions found in Delphi that date from before 150 BCE, there is mention of various cases of de facto possession of property by male slaves (368 such cases) and female slaves (123 cases) with their master’s consent (Schaps 1979, 7; Jew 2022, 218). Of course, this is not absolutely true because any property of a slave belonged, in principle, to his owner (Kyrtatas 2011, 106). But on the other hand, it is not at all certain that, in practice, a slave owner was infringing on his/her slave(s) “property rights.” Slaves often received good clothing and food from their masters so they could perform their duties more effectively. All production output from slave labor was not transferred to their owners, but part of it remained in the slaves’ hands for their living expenses (Kyrtatas 2002, 142). According to Cohen (2000, 132–145) slaves had the right to engage in economic activities and to acquire property. With this property, they could redeem their bondage and even become, under certain very strict conditions, apeleutheroi (freed citizens), which one must consider to be a significant incentive for them to be honest and competent in their duties toward their masters. Apeleutheroi then enjoyed the status of metic in Athens but rarely became full citizens (Amemiya 2007, 28; Cartledge 2016, 89). Achieving the status of apeleutheros could only happen at the will of the owner of the slave. Furthermore, one might also stress the issue of the human rights of slaves. In principle, as was the case for free citizens, the torture of a slave was prohibited (Dem., Against Androtion, 22.55; Against Aristocrates, 23.33). But in practice, slaves could face many hardships such as masters who could chain or fetter them if they proved recalcitrant. Slaves could be also sexually abused. Cases of both brutal and lenient masters have been recorded (Lewis 2018, 40–41). However, it appears that the Athenian system protected the civil and human rights of slaves, at least to some extent. Cohen (2000, 160–167), refers to the so-called hubris law which, among others, protected slaves from all kinds of abuse at the hands of their owners. When slaves were physically abused by free citizens, the law punished the latter with graphe hybreos (Aeschines, Against Timarchus, 1.16; Dem., Against Meidias, 21.47–49). Moreover, as was the case for free citizens, murdering a slave

150  The Athenian Market was punishable by law. This basic legal principle applied also to metics. If the slave was killed by a citizen or his master, the punishment imposed on the murderer was exile but not death. Slaves could testify at courts of law, even in dikai emporikai cases (Jew 2022, 218). To some extent, they also had the opportunity of enjoying a series of social events, such as, for example, participation in the religious activities of the family or in festivals such as the Anthesteria (flower festival) or in the preliminary phases of the Eleusinian mysteries. They could seek asylum like free citizens and worship the gods of their choice. There was also the possibility of being granted freedom from bondage and citizenship in exceptional cases, such as the need for manpower to fill the military’s ranks in wartime (Kyrtatas 2011, 103). A typical case is the Battle of Arginusae, in which several slaves of Athens took part (Aristoph., Fr., 190–191).20 If the position of slaves was so restrictive as is believed by a large portion of the literature, the Athenian state would never have given them such a significant incentive – that is, to upgrade their social status to become citizens. Instead, the Athenian state would have simply conscripted them into a military corps or onto a trireme, without further ado, citing a national emergency. Slaves were able to improve their social position on the back of specialized knowledge they gradually acquired as their masters’ assistants, such as the slaves Xenon, Euphron, Euphraeus and Callistratos, who operated the largest bank in Classical Athens. As already mentioned, Pasion himself started out as a slave working in the banking sector, eventually redeeming his freedom. When his owner died, Pasion married his owner’s widow, then he undertook the management of the bank and managed to become the wealthiest Athenian of the first quarter of the fourth century BCE, having amassed a vast fortune of 75T. He made many donations to the state: a gift of 1,000 shields, the equipping of 5 triremes, financial backing to the strategos Timotheus for the needs of the fleet and more. In thanks for such actions, which undoubtedly benefited the polis, he was awarded citizenship in 376. The acquisition of that status cost Pasion a small fortune. But it proves that in the face-to-face society of Athens, the importance of citizenship was paramount. His son Apollodorus continued his father’s banking activities. Another important case of a slave who managed to socially evolve was Phormion, who took over the management of Pasion’s bank, until Pasion’s son, Apollodorus, became of age. There is also the case of the slave Lampis, who managed to become the owner and captain of a ship with which he pursued commercial activity, concluding commercial contracts with merchants and lending significant amounts of money to his clients, even undertaking repayment on behalf of other lenders. Thus, some slaves could run their masters’ businesses, with their consent, after being first trained by them in the technical aspects of each business. Slaves operated these businesses either completely independently, with the sole obligation to pay their masters a certain monthly amount or, alternatively, under their supervision (Cohen 2002, 105). In the former case, the monthly amount was known as the apophora (Lewis 2018, 43). There were also cases wherein a slave was hired to serve a citizen to provide him with specific services. These slaves were

The Athenian Market  151 characterized as andrapoda misthophorounta (wage-earning slaves) (Kyrtatas 2011, 102). Slaves who possessed significant technical skills and knowledge regarding the production process were sought after, and their market price was quite high. For example, Xenophon (Memorabilia 2.5.2) mentions how Nicias paid a small fortune for a slave capable of managing a mine. Cartledge (2002, 163) writes that there was no attested competition in Attica between slave-run estates and peasants’ small farms. These peasants often worked together with slaveholders in the same fields and farms in a symbiotic way “like the horse with the carriage.” Of course, ancient Athenian society (and consequently the Greek one as a whole) was not classless, but it would be wrong to interpret it in terms of “class struggle,” as suggested by the Marxist intelligentsia and those historians who tried to view ancient Greek society through Marxist spectacles (see, for example, de Ste Croix 1981). Except for the special conditions under which the reform of Solon took place (which concerned dependent agriculturalists and not chattel slaves), there were no major social uprising of slaves or any kind of “victory of the proletariat and the establishment of a socialist society” in Classical Athens and in the ancient Greek world in general, nor were slaves ever united as a “class.” Various local character uprisings of slaves took place, indeed. For example, according to Nymphodorus of Syracuse, an itinerant ethnographer who lived in the third century BCE, there was an uprising of slaves in Chios at the turn of the fourth century BCE led by a slave named Drimakos.21 More characteristic cases of revolts with socio-economic character took place in the Hellenistic period in the Achaean and the Aetolian federal leagues’ territories during the time of the Spartan King Cleomenes III. The basic demands in these uprisings were the redistribution of land and debt forgiveness (Rostovtzeff 1941, 206–208, 210–214; Economou 2020).22 But there is no tangible evidence to interpret these events as “class struggles.” As a final comment, the above views indicate the reasons the social status of slaves was superior in Athens than societies like Sparta and Rome, basically because it went so far as to provide opportunities for social advancement to the slaves, at least, to some extent. The slave labor system in Athens was directly linked to the success of the Athenian productive model (Bresson 2016a, 221). The same applies also for metics. Athens was receptive to metics. However, it is very difficult to determine the degree of “openness” to “migrant” metics by the rest of the members of the Athenian Alliance. Some allied states may not have been as receptive as others. As already mentioned above, there is strong evidence regarding the Athenian case in which free citizens, metics and slaves worked efficiently together in important projects such as the construction of Erechtheium, and, equally important, they received the same pay. This is emphatically recognized by Pseudo-Xenophon (Con., 11.1–2) who writes that: If anyone is also startled by the fact that they let the slaves live luxuriously there and some of them sumptuously, it would be clear that even this they do

152  The Athenian Market for a reason. For where there is a naval power, it is necessary from financial considerations to be slaves to the slaves in order to take a portion of their earnings, and it is then necessary to let them go free. And where there are rich slaves, it is no longer profitable in such a place for my slave to fear you. In Sparta my slave would fear you; but if your slave fears me, there will be the chance that he will give over his money so as not to have to worry anymore. For this reason we have set up equality between slaves and free men, and between metics and citizens (emphasis by the author). The city needs metics in view of the many different trades and the fleet. Accordingly, then, we have reasonably set up a similar equality also for the metics. Plato (Rep., 563b), Pseudo-Xenophon (Con., 10.10.2) and Cartledge (2002, 163) provide supportive evidence as a proof of the rightness of the above passage. And Vlassopoulos (2009, 348) emphatically writes that in Athens of the times, slaves and free men exercised the same professions, and this meant that it was often necessary to accord slaves an extensive freedom of movement and initiative. This overlap made it impossible to differentiate status solely on the basis of profession or living conditions. Thus, a number of slaves were in a position to take advantage of this blurring of identities to escape detection, avoid maltreatment and create better conditions for themselves. Notes 1 An excellent short guide regarding the excavations in the agora (under the American School of Classical Studies at Athens), accompanied by wonderful descriptions and high-quality images is provided by Camp (2003). 2 A modern form of this, is provided through platforms such as Airbnb, which provides short-term homestay services. 3 Since the ancient times, it is known that the wider area of today’s Ukraine was a large granary for the rest of Europe. Notice, for example, how much the price of cereal products in the EU today has risen because of the 2022 Russo-Ukrainian War, which has caused significant production shortages (millions of tons) and as a result, has caused the rise of inflation throughout the EU and the loss of purchase value for European consumers. 4 For an analytical guide of weights and measures in Classical Athens, see https://web​ .archive​.org​/web​/20050408035420​/http:/​/www​.tulane​.edu/​~august​/H310​/handouts​/ Coinage​.htm​#Measures. 5 It is not our intention to cite, at this point, all the evidence in the literature regarding the debate for the correct typological interpretation between naukleroi and emporoi. But readers can further read Woolmer (2015), Bresson (2016a) and Leese (2017), among others, regarding this. 6 For such networks in the Aegean, see also Constantakopoulou (2007) and, for the Ancient Greek world in general, see Mack (2015). 7 The US Constitution was formulated by the Founding Fathers, such as Thomas Jefferson, John Adams, John Dickinson, James Maddison and George Washington. It is known that during its composition, the Fathers were significantly influenced by the ancient Greek and Roman writers, such as Aristotle, Plutarch and Polybius. See, among others, Economou (2020) and the references provided therein.

The Athenian Market  153 8 I avoid using the word “factories” here in order not to be criticized as victim of historical anachronism, as the “factory organization” is related to the Industrial Revolution era and later on (from 1760 AD on). 9 It is a process of disassembling and examining or analyzing in detail a product or device to discover the ways and methods from which it was manufactured, usually in order to produce something similar. 10 Analytically, see Fialka (1999) for a detailed analysis of the term. A subcategory of industrial espionage is the so-called military espionage – that is, learning about an enemy's or competitor's latest research by stealing or capturing a prototype and dismantling it to develop a similar product or a better countermeasure against it. There is a large number of such cases throughout history. I only mention two characteristic examples here. The one is the development of the Soviet strategic bomber Tupolev Tu-4, which was actually a derivative of the US Boeing B-29 Superfortress strategic bomber. In 1944, three American B-29 bombers on missions over Japan were forced to land in the Soviet Union. The Soviets copied the B-29. Within 3 years, they had developed the Tupolev Tu-4, a nearly perfect copy in great numbers. The other is the copy of the first ballistic missile ever made, the V-2 rocket developed during World War II by Nazi Germany’s scientists under the supervision of the famous engineer Wernher von Braun. The V-2s were then captured by the Western Allies and were reproduced in the USA under a reverse engineering method via the so-called Operation Paperclip. Years later, Wernher von Braun developed the US space rockets that landed on the moon between 1969 to 1972 through the famous Apollo project. 11 For federalism in Ancient Greece, see Mackil (2013), Beck and Funke (2015), Economou et al. (2015), Economou and Kyriazis (2016), Economou and Kyriazis (2015, 2018) and Economou (2020), among others. 12 For Xenophon’s economic thinking in general, see Figueira (2012). 13 Migeotte (2009, 28) explains that this word also denoted the person who was responsible for the treasury or finances of a city or a kingdom. 14 Here, actually, he is referring to the manager of the household or a firm. 15 See Taylor (2003). The original work was published in 1911. 16 Vivenza (2001) analyzes how various aspects of philosophical thinking, as developed by ancient Greek philosophers, influenced Adam Smith. Jönsson (2019, 48) writes on this characteristically: The Greek influence is impressive and long lasting – for example, the first five chapters of Adam Smith’s Wealth of Nations (1776) lay out the themes of Aristotelian views on market phenomena … One of the ways Greek teachings, notably Aristotle, came to Spain and from there to Western Christianity was by way of Arab authors, notably Averroes, who commented on Plato as well as Aristotle. 17 This probably is also true by comparing the Greek land distribution to the Roman imperial latifundia, which consisted of large estates or farms destined for export: grain, olive oil, or wine. Their workforce was slaves. 18 In Classical Athens, the kyrios was the head of the household being responsible for his wife, children and any unmarried female relatives. Kyrios had to arrange the marriages of his female relatives, prepare their dowries and represent them in court, if necessary. Ideally, a woman’s kyrios would be first her father and then her husband. Under other circumstances, a son, son-in-law, or a more distant relative might take guardianship. When Athenian women married, their husband became their new kyrios (Pomeroy 1995). 19 In these games, only Greeks could participate. 20 See also Akrigg (2019), Figueira (2022) and Lyttkens and Gerding (2022) on this. 21 The island of Chios had a formidable naval power at the time. 22 Economou and Kyriazis (2019a) refer to the social uprisings in medieval Europe, focusing on the High Middle Ages in England. Many of the demands of the insurgents, such

154  The Athenian Market as Wat Tyler and John Ball in 1381, were similar to those of the various uprisings of the Hellenistic period.

Ancient Greek authors (Perseus Digital Library) Aeschines, Against Ctesiphon Aeschines, Against Timarchus Andocides, On the Mysteries Aristophanes, Acharnians Aristophanes, Frogs Aristophanes, Lysistrata Aristophanes, Wasps Aristophanes, Wealth Aristotle, Athenian Constitution Aristotle, Eudemian Ethics Aristotle, Nicomachean Ethics Aristotle, Politics Athenaeus, Deipnosophistae Demosthenes, Against Aphobus I Demosthenes, Against Androtion Demosthenes, Against Aristocrates Demosthenes, Against Callicles Demosthenes, Against Callippus Demosthenes, Against Dionysodorus Demosthenes, Against Eubulides Demosthenes, Against Lacritus Demosthenes, Against Leochares Demosthenes, Against Meidias Demosthenes, Against Pantaenetus Demosthenes, Against Phaenippus Demosthenes, For Phormio Demosthenes, On the Crown Demosthenes, On the False Embassy Herodotus, The Histories Hesiod, Works and Days Hyperides, In Defence of Euxenippus Isocrates, Areopagiticus Isocrates, Panegyricus Isocrates, Trapeziticus Isocrates, To Demonicus Lysias, Accusation of Calumny Lysias, Against Agoratus Lysias, Against Eratosthenes Lysias, Against Pancleon Lysias, Against the Corn Dealers Lysias, On the Olive Stump Lysias, On the Property of Aristophanes Lysias, On the Refusal of Pension Plato, Laws

The Athenian Market  155 Plato, Republic Polybius, Histories Pseudo-Xenophon, Constitution of the Athenians Thucydides, Histories (The Peloponnesian War) Xenophon, Cyropaedia Xenophon, Hellenika Xenophon, Memorabilia Xenophon, Ways and Means Xenophon, Symposium

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158  The Athenian Market Hall, J. M., (2013), ‘The rise of state action in the Archaic age,’ in H. Beck (Ed.), A Companion to Ancient Greek Government, Malden, MA: Wiley-Blackwell, 9–21. Hanson, V. D., (1995), The Other Greeks: The Family Farm and the Agrarian Roots of Western Civilization, Berkeley and Los Angeles: University of California Press. Harris, E. M., (2002), ‘Workshop, marketplace and household,’ in P. Cartledge, E. E. Cohen, L. Foxhall (Eds.), Money, Labour and Land, London, New York: Routledge, 67–99. Harris, E. M., (2016), ‘The legal foundations of economic growth in ancient Greece: The role of property records,’ in E. M. Harris, D. M. Lewis, M. Woolmer (Eds.), The Ancient Greek Economy: Markets, Households and City States, New York: Cambridge University Press, 116–147. Harris, E. M., Lewis, D. M., (2016), ‘Introduction: Markets in classical and Hellenistic Greece,’ in E. M. Harris, D. M. Lewis, M. Woolmer (Eds.), The Ancient Greek Economy: Markets, Households and City States, New York: Cambridge University Press, 1–37. Harris, J. R., (1998), Industrial Espionage and Technology Transfer. Britain and France in the 18th Century, London, New York: Routledge. Hasebroek, J., ([1933], 1965), Trade and Politics in Ancient Greece, London: G. Bell. Hölscher, T., (2007), ‘Urban spaces and central places. The Greek World,’ in S. E. Alcock, R. Osborne (Eds.), Classical Archaeology, Malden, Oxford: Blackwell Publishing, 164–181. Izdebski, A., Słoczyński, T., Bonnier, A., Koloch, G., Kouli, K., (2020), ‘Landscape change and trade in Ancient Greece: Evidence from Pollen Data,’ The Economic Journal, 130(632), 2596–2618. Jew, D., (2022), ‘The non-agricultural economy: Artisans, traders,’ in S. von Reden (Ed.), The Cambridge Companion to Ancient Greek Economy, Cambridge: Cambridge University Press, 202–220. Johnstone, S., (2011), A History of Trust in Ancient Greece, Chicago: The University of Chicago Press. Jönsson, S., (2019), A Comparative History of Bank Failures. From Medici to Barings, London, New York: Routledge. Jones, C., Hesterly, W. S., Borgatti, S. P., (1997), ‘A general theory of network governance: Exchange conditions and social mechanisms,’ Academy of Management Review, 22(4), 911–945. Kallet, L., (2007), ‘The Athenian economy,‘ in L. J. Samons II (Ed.), The Cambridge Companion to the Age of Pericles, Cambridge: Cambridge University Press, 70–95. Kirzner, I. M., (1973), Competition and Entrepreneurship, Chicago: University of Chicago Press. Kron, G., (2016), ‘Classical Greek trade in comparative perspective,‘ in E. M. Harris, D. M. Lewis, M. Woolmer (Eds.), The Ancient Greek Economy: Markets, Households and City States, New York: Cambridge University Press, 356–380. Krugman, P., (1997), The Age of Diminished Expectations, 3rd ed., Cambridge, MA: The MIT Press. Krugman, P. R., Obstfeld, M., Melitz, M., (2018), International Economics: Theory and Policy, 11th ed., New York: Pearson. Kyriazis, N. C., (2009), ‘Financing the Athenian state: Public choice in the age of Demosthenes,’ European Journal of Law and Economics, 27(2), 109–127. Kyrtatas, D., (2002), ‘Domination and exploitation,’ in P. Cartledge, E. E. Cohen, L. Foxhall, (Eds.), Money, Labour and Land, London, New York: Routledge, 140–155. Kyrtatas, D., (2011), ‘Slavery and economy in the Greek world,’ in K. Bradley, P. Cartledge (Eds.), The Cambridge World History of Slavery, Vol 1. The Ancient Mediterranean World, Cambridge: Cambridge University Press, 91–111.

The Athenian Market  159 Lang, M., (2004), The Athenian Citizen. Democracy in the Athenian Agora, Athens: American School of Classical Studies at Athens. Leese, M. S., (2017), ‘Kapêloi and economic rationality in fourth-century B.C.E. Athens,’ Illinois Classical Studies, 42(1), 41–59. Lewis, D. M., (2018), Greek Slave Systems in their Eastern Mediterranean Context, c.800146 BC, Oxford: Oxford University Press. Loomis, W. T., (1998), Wages, Welfare Costs and Inflation in Classical Athens, Michigan: Michigan University Press. Lyttkens, C. H., (2013), Economic Analysis of Institutional Change in Ancient Greece. Politics, Taxation and Rational Behaviour, London, New York: Routledge. Lyttkens, C. H., Gerding, H., (2022), ‘Coping with chronic warfare. The Athenian experience,‘ in E. M. L. Economou, N. C. Kyriazis, A. Platias (Eds.), Democracy and Salamis. 2500 Years After the Battle that Saved Greece And the Western World, Cham: Springer Verlag, 181–200. Mack, W., (2015), Proxeny and Polis: Institutional Networks in the Ancient Greek World, Oxford: Oxford University Press. Mackil, E., (2013), Creating a Common Polity: Religion, Economy, and Politics in the Making of the Greek Koinon, Berkeley, Los Angeles: University of California Press. Manning, J. G., (2018), The Open Sea: The Economic Life of the Ancient Mediterranean World from the Iron Age to the Rise of Rome, Princeton: Princeton University Press. Manville, B., Ober, J., (2003), A Company of Citizens, Boston, MA: Harvard Business School Press. Marshall, A., (1920), Principles of Economics, 8th edn., London: Macmillan. Maslow, A. H., (1943), ‘A theory of human motivation,’ Psychological Review, 50(4), 370–96. McAuley, A., (2013), ‘Officials and office-holding,’ in H. Beck (Ed.), A Companion to Ancient Greek Government, Malden, MA: Willey-Blackwell, 174–190. Migeotte, L., (2009), The Economy of the Greek Cities. From the Archaic Period to the Early Roman Empire, Berkeley, Los Angeles, London: University of California Press. Morris, I., (2002), ‘Hard surfaces,’ in P. Cartledge, E. E. Cohen, L. Foxhall (Eds.), Money, Labour and Land, London, New York: Routledge, 8–43. Müller, C., (2016), ‘Globalization, transnationalism, and the local in Ancient Greece. Classical Studies, Social and Economic History,’ Oxford Handbooks Online, Oxford University Press. Available at: http://www​.oxfordhandbooks​.com​/view​/10​.1093​/ oxfordhb​/9780199935390​.001​.0001​/oxfordhb​-9780199935390​-e​-42 Ober, J., (1978), ‘Views of sea power in the fourth-century attic orators,’ The Ancient World, 1(3), 119–130. Ober, J., (2008), Democracy and Knowledge. Innovation and Learning in Classical Athens, Princeton: Princeton University Press. Ober, J., Scheidel, W., (2022), ‘Inequality,‘ in S. von Reden (Ed.), The Cambridge Companion to Ancient Greek Economy, Cambridge: Cambridge University Press, 404–420. O’ Halloran, B., (2018), The Political Economy of Classical Athens: A Naval Perspective, Leiden: Brill. Osborne, R., (1991), ‘Pride and prejudice, sense and subsistence: Exchange and society in the Greek city,’ in J. Rich, A. Wallace-Hadrill (Eds.), City and Country in the Ancient World, London, New York: Routledge, 119–145. Osborne, R., (1996), ‘Pots, trade and the archaic Greek economy,’ Antiquity, 70(267), 31–44. Patriquin, L., (2015), Economic Equality and Direct Democracy in Ancient Athens, Basingstoke, Hampshire: Palgrave MacMillan.

160  The Athenian Market Pomeroy, S. B., (1995), Goddesses, Whores, Wifes and Slaves, New York: Schocken Books. Pritchard, D. M., (2014), ‘The position of attic women in democratic Athens,’ Greece and Rome, 61(2), 174–193. Pritchard, D. M., (2015), Public Spending and Democracy in Classical Athens, Austin: University of Texas Press. Rahyab, S., (2019), ‘The rise and development of the office of Agoranomos in Greco-Roman Egypt,’ New England Classical Journal, 46(1), 37–61. Richmond, J. A., (1998), ‘Spies in ancient Greece,’ Greece & Rome, Second Series, 45(1), 1–18. Rostovtzeff, M., ([1941], 1953), The Social and Economic History of the Hellenistic World, Oxford: Clarendon Press. Saba, S., (2020), Isopoliteia in Hellenistic Times, Leiden, Boston: Brill. Samuelson, P. A., (1962), ‘The gains from International trade once again,’ Economic Journal, 72, 820–829. Samuelson, P. A., Nordhaus, W. D., (2010), Economics, 19th ed., New York: McGraw Hill. Saxenian, A. N., (1994), Regional Advantage: Culture and Competition in Silicon Valley and Route 128, Cambridge, MA: Harvard University Press. Schaps, D. M., (1979), Economic Rights of Women, Edinburg: Edinburg University Press. Schaps, D. M., (2022), ‘Money, credit, and banking,’ in S. von Reden (Ed.), The Cambridge Companion to Ancient Greek Economy, Cambridge: Cambridge University Press, 237–249. Schumpeter, J. A., (1928), ‘The instability of capitalism,’ Economic Journal, 8(151), 361–386. Schumpeter, J. A., (1934), The Theory of Economic Development. An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle, Cambridge, MA: Harvard University Press. Schumpeter, J. A., (1939), Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process, Vol. 1, New York: McGraw-Hill. Sherwood, A. N., Nikolic, M., Humphrey, J. W., Oleson, J. P., (2020), Greek and Roman Technology. A Sourcebook of Translated Greek and Roman Texts, London, New York: Routledge. Smith, A., ([1776], 1977), An Inquiry into the Nature and Causes of the Wealth of Nations, Chicago: Chicago University Press. Spears, B., (1984), ‘A perspective of the history of women’s sport in Ancient Greece,’ Journal of Sport History, 11(2), 32–47. Taylor, C., (2017), Poverty, Wealth, and Well-being: Experiencing Penia in Democratic Athens, Oxford: Oxford University Press. Taylor, F. W., (2003), Scientific Management, London: Routledge. Travlos, J., (1980), Pictorial Dictionary of Ancient Athens, New York: Hacker Art Books. Tirole, J., (2017), Economics for the Common Good, Princeton: Princeton University Press. Van Alfen, P. G., (2016), ‘Aegean-Levantine trade, 600-300 BCE: Commodities, consumers and the problem of autarkeia,’ in E. M. Harris, D. M. Lewis, M. Woolmer (Eds.), The Ancient Greek Economy: Markets, Households and City States, New York: Cambridge University Press, 277–299. Van Wees, H., (2013), Ships and Silver, Taxes and Tribute. A Fiscal History of Archaic Athens, London, New York: I.B. Tauris. Veblen, T. B., (1899), The Theory of the Leisure Class: An Economic Study in the Evolution of Institutions, New York: Macmillan.

The Athenian Market  161 Vivenza, G., (2001), Adam Smith and the Classics: The Classical Heritage in Adam Smith’s Thought, Oxford: Oxford University Press. Vlassopoulos, K., (2007), ‘Free spaces: Identity, experience, and democracy in Classical Athens,’ The Classical Quarterly, 57(1), 33–52. Vlassopoulos, K., (2009), ‘Slavery, freedom and citizenship in classical Athens: beyond a legalistic approach,’ European Review of History: Revue Europeenne d'Histoire, 16(3), 347–363. Woolmer, M., (2015), ‘Emporoi kai nauklēroi: redefining commercial roles in Classical Greece,’ Journal of Ancient History, 3(2), 150–172. Woolmer, M., (2016), ‘Forging links between regions: Trade policy in classical Athens,’ in E. M. Harris, D. M. Lewis, M. Woolmer (Eds.), The Ancient Greek Economy: Markets, Households and City States, New York: Cambridge University Press, 66–89. Wright, F. A., (1923), Feminism in Greek Literature. From Homer to Aristotle, London: Routledge.

6

The Financial Institutions of the Athenian Economy

6.1 Banking Services and Maritime Loans Many researchers around the world mistakenly believe that the origins of the banking system are to be found in medieval Europe. However, it is historically safe to claim that as early as the fifth century BCE, a series of banking services were fully practiced in Athens. Ancient sources and the modern literature refute Finley’s (1973, 141–134; 1985, 196–197) arguments that there were no credit services behind these activities. Finley’s arguments (1973, 1985, 141, 198) that borrowing only occurred if financial resources could not be secured from one’s circle of friends is also refuted. Finley’s model (1973, 1983, 1985) considers the Athenian banking system as rudimentary. These arguments have now been revised by a plethora of scholars, such as Cohen (1992), Shipton (1997), Amemiya (2007) Bitros and Karayiannis (2008), Ober (2008, 2011, 2015), Kyriazis (2009), Engen (2010), Halkos and Kyriazis (2010), Lyttkens (2013), Mackil (2013), Bergh and Lyttkens (2014), Bitros et al. (2020), Leese (2021) and others. Banking services were provided mostly by citizens and metics. As this chapter further argues, banking services were widespread in the Greek world not only during the Classical period but also during the Hellenistic in which at least 33 citystates are attested as providing banking services (Bogaert 1968). According to Roberts (2011, 130), there was a rise in banking services during the Hellenistic period, especially in trading centers, such as on the island of Delos at the end of the third to the beginning of the second-century BCE, as well as at Olympia because of her homonymous sporting games. This is an important element that proves their expanding character from the Classical period onward. Merchants developed commercial activity even in remote areas, where, with the intervention of a banker, through correspondence, they could give directions to their associates – commercial representatives – regarding the nature of commercial activities to be carried out (Johnstone 2011, 22; Schaps 2022, 247). Furthermore, as for the objections regarding whether the relevant activities described by the ancient sources fall into the category of “banking,” Cohen (1992), in his seminal and landmark book Athenian Economy and Society: A Banking Perspective, provides very convincing answers. Loans were offered by bankers to earn profit from interest. In particular, Cohen persuasively argues that the Athenian banking system, in practice, provided the following set of services: DOI:  10.4324/9781003434146-6

The Financial Institutions of the Athenian Economy  163

• • • • • • • • • • • •

Accepted deposits. Carried out payments on behalf of the bankers’ customers. Provided loans to various business operations, such as maritime loans. Provided loans for consumption. Financed what nowadays is known as consumer credit. Exchanged Athenian coins with foreign currencies. Facilitated export–import activities by settling payments to merchants abroad. Provided insurance services. Provided consultancy services to important customers. Provided collateral, for example, on a ship to cover maritime loans. Accepted documents and valuables for safekeeping. Formed partnerships with each other to create a common financial pool and provide (mostly) maritime loans to merchants in need. • Provide, upon request, witnesses to confirm an agreement to enter into a contract between third parties, between their customers or between their customers and third parties. • Helped wealthy Athenians and foreigners to conceal a part of their fortune to evade taxation. In particular, Athenian banking services included security for money and valuables (something like today’s bank vaults) and facilitated commercial activity by keeping accounts for their customers and merchants. Through these accounts, the creditors of these merchants could be paid. In essence, a bank was able even to provide money transfer payments on behalf of a customer to third parties (e.g., their customers’ suppliers) for the purchase of goods. Therefore, the Athenian bankers offered the two basic elements of a proper banking system: banking intermediation and the guarantee for the execution of transactions between the bank, its customers and their associates. To achieve this, an Athenian banker, by definition, would have had to credibly commit to his duties and responsibilities vis-à-vis his customers (Dem., F. Ph., 36.6).1 More specialized cases have also been recorded, such as lending services under the personal guarantee of a third party and lending a loan by more than one person jointly (Halkos and Kyriazis 2010). Loans could also be obtained by foreign traders in Athens (IG II2 2741, 11. 5–6; Dem., Against Phormio, 34.36; Cohen 1992; Shipton 1997). In addition, private bankers could finance the formation of a new enterprise as well as the continuing activities of an existing one. It is, therefore, obvious that the Athenian banking system contributed to an additional key intertemporal banking principle, which is the refinancing of business plans as a key pillar of investment and growth. According to Bogaert (1968, 361), loans in Classical Athens were generally short term, of usually one year in duration. Loans of a longer duration increased the loan’s level of risk. Athenian orators proclaimed the public utility of loans at reasonable interest rates as a means for stimulating trade (Maloney 1971, 79). The ordinary interest rate for someone who borrowed money from a bank varied between 12% and 18%. There were also cases of even lower interest rates. Loans contracted at an interest

164  The Financial Institutions of the Athenian Economy rate of 10% were considered to be very favorable for the borrower (ibid., 80). On the other hand, there were also cases of usurious loans, which were considered ethically wrong (ibid. 79–88). In such cases, borrowers paid interest rates as high as 36%. Such loans were mostly considered personal loans (Demosthenes, Against Boeotus II, 40.52). Homer and Sylla (2005, Chapter 3) provide us with a plethora of known cases of such loans. Cohen (1992, 7) adds that there was also the possibility of financing the purchase of goods (that is a consumer type of loan) and slaves by a bank in favor of a buyer, at an interest rate of 35% (Cohen 1992, 7). Excessive usury was considered an act that brought about social outcry and resentment (Isaeus, Cleonymus, 12). When merchants needed to take out loans to finance their activities, those who specialized in maritime commerce and transfer of goods to and from Athens paid higher interest rates ranging from 15% to 35%. Rarely, depending on the degree of risk of a voyage (cargo with or without return trip, etc.) and in exceptional cases, interest rates may have been as high as 100%. Such rates were directly related to the high risk of these loans – for example, a risky voyage in which the ship may be attacked by pirates or face a storm on the high seas with the danger of losing the entire cargo (Schefold 2011).2 Sea voyages were avoided during the winter because they were considered very dangerous (Andoc., M., 137–138). On the issue of returns on investment, Christesen (2003, 52) provides the following estimations: investment in property offered a yield of 8%, investment in loans on land leases and domestic commerce offered yield of 10%–18%, investment on the ownership of slaves could offer a yield of 15%–25%, investment on maritime lending, 25%– 50% and, finally, investing on silver mining was too variable to state a meaningful average. In accordance with the above evidence, Franklin (2015, 259) argues that the high interest rates on maritime loans suggest pricing of risk, and there were different levels of interest rates applying to different levels of risk. For example, a loan signed in around 340 BCE for a voyage to Bosporus was made with an interest of 225 drachmae. If the voyage set sail out from Pontus to Hieron in Caria (Asia Minor) after the rising of star Arcturus, the interest charged was 300 drachmae. Arcturus rises in mid-September; thus, it appears that the higher rate was meant to account for the danger of storms of the autumn equinox. Franklin believes that this provides evidence of pricing according to the level of risk. What’s more, the differences in interest rates offered by banker-lenders to merchants indicates that those lenders in Piraeus, before committing to financing a voyage, were able to draw up an accurate assessment of any would-be investor. Demosthenes (F. Ph., 36.11) compared two companies, a bank and a shield workshop, each with a different level of profit but also a different level of risk. He noted that the entrepreneur who feels a stronger risk aversion will prefer to run a business activity that is related to lower risk but also to lower profits. Obviously, Demosthenes understood that the opposite also applies – the entrepreneur who takes a higher risk will prefer a business activity that generates higher potential profits. This is the famous risk-taking vs risk aversion dilemma as described in today’s Financial Economics.

The Financial Institutions of the Athenian Economy  165 There were cases of citizens or merchants, either Athenian or not, who misused their loans. For example, a general named Timotheus borrowed money from a bank but misappropriated them, which became overdue, and he was taken to court by the banker. To avoid such incidents, bankers-lenders could seek justice in court where special laws offered protection against any transgressive behavior by a borrower against them (Dem., Against Phormio, 34.1–2; Ag. Lac., 35.1–5). This was the norm. However, cases have also been recorded in which loans were not repaid, as happened with the bank of Aristolochos, which, because of extending excessive credit, it went bankrupt (Cohen 1992, 215–224).3 As was already mentioned, taking out consumer loans was considered a counterproductive practice that could lead to financial ruin for borrowers; thus, such loans were burdened by high interest rates of 36% (Aristophanes, Clouds, 35–40; Xen., W.M., 3.9). Such an issue has an intertemporal character and was intensively discussed after the 2007/2008 global financial crisis that emerged in the USA due to excessive risk-taking by banks. Athenian society rewarded the use of loans for investment instead of consumption. Consumer loans were considered detrimental to the economy. An Athenian banker kept ledgers of his deposits and loans. According to Cohen (1992), a banker recorded:

• • • • •

The amount of the loan (Demosthenes, To Callipus, 52.6). Who asked for it. When the loan was made and what was agreed. The amount of money to be repaid. Any guarantees or pledges, including items such as mortgages given on the loan. • The purpose of the loan, e.g., to cover the cost of transporting timber. This last prerequisite should be considered as very important. as it enabled the lender to ensure, to some extent, that the loan given to an individual would be applied to a productive investment. One can speculate that this provision would enable the lender-banker either to demand the termination of the loan and the return of the money or to take to court a borrower who had unreliably managed a loan he received on the grounds of breach of contract. In other words, the loan agreement served as a safeguard for the faithful application of the purpose of the loan: the lender-banker could rely on this record in the courts to ensure reimbursement by the borrower, while for the latter, it acted as a discouraging element should he aspire to use the borrowed funds for a purpose other than that recorded in the agreement. Furthermore, in facilitating economic activity, Cohen (1992, 14) describes an interesting case in which a dealer in swords and furniture, to clinch a deal, offered his prospective customer a loan to cover his purchase. That is, the seller essentially financed his buyer’s purchase, apparently to encourage him to commit to the deal. This type of buying and selling was common. Millet (1991) classifies this to what is today known as credit sales and argues that, in the event of a dispute between buyer and seller due to the nature of such a transaction, the courts recognized such

166  The Financial Institutions of the Athenian Economy transactions as legal. Credit sales meant that a consumer does not require a payment made in full at the time of purchase. Such an institutional arrangement is also related to what is characterized today as consumer credit policies. But, in any case, it proves that the Athenian legal system was not only familiar with such kinds of specialized transactions, but it also recognized their validity, thus, legally protecting traders. It stands also as one more among the many other elements which prove that Finley’s (1985, 198) view that “the absence of credit-creating instruments and institutions was an unshaken foundation of the ancient economy” should be rejected. There are also cases in which wealthy Athenians and foreigners often hid money in private banks to evade their tax obligations to the state (Cohen 1992, 191, 199; Christ 2006). The way of hiding had the form of personal bank deposits. Thus, banks offered safekeeping of their customers’ assets in a way quite similar to modern practice. “Disclosed property” was characterized as phanera ousia, and hidden property was categorized as aphanes ousia. Cohen (1992, 8) writes that in the aphanes market, investments and ownership were cloaked in secrecy as protection from creditors, tax collectors and other potential adversaries. Essentially, Athenian bankers were offering a kind of offshore service to specific customers under a modern interpretation. A typical case is the example of Sopaios, the son of the king of Pontus, Satyros. Sopaios had access to the kingdom’s treasury, and he embezzled funds and fled to Athens. When Satyros demanded the funds be returned, the son hid the funds in the bank of the Athenian banker Pasion. Another relevant example is that of the wealthy Athenian Stephanos, who was accused by Demosthenes of similarly concealing funds in banks (Cohen 1992, 203–204; Βitros and Karayiannis 2008; Halkos and Kyriazis 2010). This is an important and quite neglected topic in the bibliography, and I acknowledge that there are still significant ramifications that need further exploration. Figure 6.1 describes how the Athenian banking system, which flourished due to the international maritime orientation of the Athenian state, proved to have been a key financial institution for the growth of the Athenian economy during the Classical period. 6.2 The Athenian Bankers In principle, in Classical Athens, banks were synonymous with their owners, usually, a rich Athenian who had the financial means to perform banking activities. In everyday life, people would say either “I have a loan out with Pasion’s bank,” or “I have a deposit with Phormion.” But, as Cohen (1992, Ch. 4) shows, the identification of a bank by its owner does not mean that the bank’s success should be attributed only to him. This is because banks were not run only by their owners. Even though banking in principle was a strictly personal business, banks could employ several slaves as employees to ensure the necessary continuity of operation in favor of their customers. In particular, when a banker died, it was customary for the management of his bank to pass to one of his trusted employees, most likely a slave, who then married

The Financial Institutions of the Athenian Economy  167

This new income increases the oveall wealth (W) of the economy

The 'turn to the sea' creates wealth from the overseas trade

Investments create growth and new income (I)

Wealth creates savings though the banking system Savings create investments through the allocation of available investment capital

Figure 6.1  “Turn to the sea,” banks, savings, investments and economic growth.

the deceased’s wife, as was the case of Pasion described in Chapter 5. Pasion eventually retired and handed over the management of his bank to his trusted slave, Phormion, until his own son, Apollodorus, came of age. In turn, when he retired, Apollodorus handed over the management of the family business to four managers (Glotz [1926], 2013, 303; Cohen 1992, 61–80). Second, there were cases in which more than one person owned a bank, which, in effect, then functioned as a primitive version of a joint-stock company.4 When someone wanted to set up a banking institution, he was not subjected to time-consuming bureaucratic procedures for its licensing by the state (as is the case with the current Greek state, for example) but was obliged to provide guarantors, i.e., other holders of capital who would be also responsible for the bank’s obligations against third parties. This means that the Athenians also understood the modern economic principle that for banking to be effective, it must be characterized by the spreading of risk. For a banking organization to be considered trustworthy and function efficiently in the market, it had to be backed by ample assets and reliable investors to provide financial support as guarantors if needed. Each banker had a bench for conducting banking activities in a specific part of the agora.5 Athenians conceived of dedicating a specially designated area in the agora for financial transactions, instinctively being aware that their agora had developed

168  The Financial Institutions of the Athenian Economy into an “international financial center,” something like the Square Mile in the city of London or the Manhattan Financial District in New York City today, where economic activity is mainly related to financial services. There was also a second location exclusively used for banking services in Piraeus. Cohen (1992, 18), based on the surviving sources, considers that in addition to the benches, Athenian trapezitai (bankers) also used their homes for providing banking services and almost certainly as a place to secure remittances or valuables entrusted to them by their depositors-customers. The above information is convincing enough to justify the view of Glotz ([1926] 2013, 303), who wrote that trapezai (banks)6 had become the irreplaceable factors of trade and essential instruments of the economic life of the city of Athens. Of course it also has to be acknowledged that although banking services presented great prospects for further development throughout the Classical period, the bankers (some of these were metics) should be considered few in comparison to the perhaps 500–1,000 large landowners, not to mention those Athenians who invested in craft production or trade and those operating mines. 6.2.1 The Argyramoiboi (Money Changers)

According to Cohen (1992, 18–19), argyramoiboi were in charge of exchanging coins and precious metals. Usually, they charged a fee of 5%–6% of the value of the exchange, which was called the kollybos. For that reason, they were more familiarly known as kollybistai. Any merchant, citizen or not, could find an argyramoibos to exchange his coins into another currency, local or foreign. This profession was one based on trust: nobody would trust an argyramoibos whose reputation was not spotless. Thus, in effect, the argyramoiboi indirectly performed an audit on the currencies they bought or sold. In a more general interpretation, the argyramoiboi were individuals who unofficially acted in favor of the state to secure, to some extent, the reliability of a large portion of the currency circulating in the Athenian economy. The other important activity of the argyramoiboi relates to banking services. Argyramoiboi accepted deposits of individuals and granted loans to others, with interest. Loan agreements were made either hand in hand, in the presence of two witnesses, or after the signing of contracts between the counterparties. These contracts were held by the argyramoiboi, with copies delivered to the counterparties. However, it is not known whether more than two counterparties could participate in such contracts. As in the case of bankers, the benches of the argyramoiboi were also located in the agora. Argyramoiboi gradually evolved into bankers. The profession of a moneychanger predated the emergence of banks, and its beginning probably dates back to the end of the sixth or the beginning of the fifth century BCE – that is, during the period when many city-states began issuing their own currencies, and commerce was expanding throughout the Mediterranean (Bitros et al. 2020, 30–31). 6.2.2 The Development of Insurance, Securities and Mortgages

It would be incomplete, in terms of the economic organization of the Athenian financial institutions, if the extensive commercial activity and the high volume of

The Financial Institutions of the Athenian Economy  169 banking transactions that was taking place during the Classical period between Athens and its commercial network in the Mediterranean was not accompanied by the next conceptual step – insurance services – to make commercial activity more efficient, profitable and secure for the traders involved. Some authors, such as De Roover (1945, 173), argue that marine insurance was unknown to Greek and Roman antiquity. He categorically claims that the first insurance contracts were drawn up by Italian merchants during the Middle Ages to whom we owe the invention of the bill of exchange, double-entry bookkeeping and commercial banking as well as other innovations in business procedure. But Finley (1973, 23, 142) and more modern authors such as Cohen (1992, 141), Acton (2014, 252–253) and Franklin (2015, 259) provide evidence that rejects the above view regarding insurance. A primitive version of insurance of the Athenian citizens is attested from the time of the tyrant Peisistratus, one of the rulers of Athens before the establishment of democracy in 508, who passed a law that citizens and families disabled due to war were automatically compensated – thus, insured – by the state (Plut., Sol., 31). The possibility of insurance, which is associated with the concept of the welfare state, was extended to women (pregnancy was emphasized). Subsequently, the insurance mechanism was extended between traders. One example was the case of the merchants Zenothemes and Hygestratos, who purchased a cargo of wheat for sale in Athens. For this purpose, they entered into a loan agreement known as a syngraphe with bankers in Syracuse with their vessel’s cargo as a guarantee. The loan would be repaid in Athens, based on the existing shipping documents, on the condition that the ship arrived in Piraeus safely. However, the two merchants attempted to sink the ship to reap both the loan and the security. Their plan was forestalled by the ship’s own crew and, eventually, both Zenothemes and Hygestratos were put on trial in Athens (Demosthenes, Ag. Zen.). Maritime loans were popular. As Cohen (1992, 140) argues, hundreds of ship cargoes were required annually to satisfy Attica’s enormous appetite for food and other items. Epigraphical and archaeological evidence suggests that in the fourth century, a single ship might typically carry about 3,000 medimnoi of grain (Casson 1971, 183–84). Engen (2010, 83) assumes a minimum of 600 shiploads of grain annually and adds that total annual grain imports were more than 800,000 medimnoi, a huge amount. Furthermore, there was a law that demanded that any voyage (usually involving a round trip) undertaken by an Athenian or subsidized by an Athenian had to carry its cargo of grain to Athens (Acton 2014, 252–253). Contracts specified the route and timing, and interest was charged according to the length of the voyage and the level of its danger, which often depended on the time of year. As already argued, ordinary loans were made at annual interest rates of about 10%–12%. A typical 2–3-month journey, such as from Athens to the Bosporus and back, might be burdened by an interest rate of 20%–30%, while a shorter, one-way voyage, e.g., from Sestos to Athens, might be charged 12.5%. A loan of 3,000 drachmae for a voyage from Athens to the Bosporus via Mende or

170  The Financial Institutions of the Athenian Economy Scione was charged 22.5% if the return from Pontus was before mid-September and 30% at a later time. The rise in the interest rate was related to the winter period, which made commercial voyages more dangerous. Thus, the riskier the investment, the higher the interest rate (Bresson 2016, 284). The lender’s security for loans for a voyage might be either the cargo or the ­vessel. Acton (2014, 253) further writes that these loans acted as a form of insurance for the trader by allowing him to risk someone else’s money, the premium being the high rate of interest on the loan. He adds that many such loans were syndicated, which enabled investors to diversify into multiple shared risks rather than take on a few large ones. Insurance services were not exclusive to Athens but were also implemented by other Greek states of the Classical and Hellenistic period, as evidenced for example, by the Rhodian Sea Law of 324 BCE. Rostovtzeff ([1941], 1953) adds that this series of sophisticated commercial laws were further adopted by the Roman law as Lex Rhodia in later times. 6.3 The Establishment of Primitive Joint-stock Companies In the previous section, it was mentioned that various individual investors and additional fund guarantors could participate in the shareholding structure of Athenian banks to ensure their capital flows. 6.3.1 Joint-stock Companies in the Banking Sector

Some Athenian banks were characterized by a multi-shareholder structure, and in this sense, they should be seen as primitive versions of the later joint-stock companies (JSCs) such as the English East India Company (EIC), founded in 1600; the Dutch East India Company (VOC), founded in 1602; and the Levant Company, founded in 1592.7 The phenomenon of these primitive Athenian JSCs appeared due to the increase in the volume of commercial activity. The costs for conducting trade (purchase, sale, resale and distribution of goods) in the entrepot of Piraeus were increasing, and the monetary claims of traders participating in commercial activity were rising accordingly. A thirst for higher value loans from merchant-borrowers had emerged, leading to the solution of the common pooling of funds between bankers to enable them to respond effectively and reliably to the needs of financing international trade. Not only were lenders able to form a common pool to offer financing but borrowers could also band together to apply for loans. One such case mentioned by Demosthenes (Ag. Zen., 32.16–17) is that of Protus and Phertatus who jointly borrowed money from a banker. Demosthenes (Against Callippus, 52.20) also mentions Megacleides and Thrasyllus who borrowed money from Lycon. Diodotus, the well-known orator Demosthenes, Paianieus, Demosthenes’s father and Stratocles also appear as bank partners. This information is important because it shows that the bankers were not just individual “financiers”; many banks were co-financed by co-owners with differentiated levels of participation, in a logic, more or less,

The Financial Institutions of the Athenian Economy  171 similar to the shareholding capital structure of today’s joint-stock or limited liability companies (LLCs) with differentiated shares. Another characteristic case comes from a speech of Demosthenes (Against Dionysodorus). The story tells us of two merchants, Dareius and Pamphilus, who agreed to lend 3,000 drachmae to Dionysodorus and Parmeniscus, mortgaging their cargo ship for a voyage from Piraeus to Egypt and back. The ship sailed to Egypt, captained by Parmeniscus, while Dionysodorus stayed in Athens. On its return voyage, the ship was damaged and forced to find shelter on Rhodes. There, Parmeniscus sold the grain he had bought with the loan. When Dareius and Pamphilus, however, learned of this, they demanded that Dionysodorus repay the loan, including the interest already agreed upon. Dionysodorus offered to repay the loan with the interest accumulated as far as Rhodes. This proposal did not satisfy the lenders, who then brought suit against him. After all, the syngraphe (written contract) they had signed with Dionysodorus and Parmeniscus had granted them the right to apply to the courts. Within that syngraphe, Dionysodorus had agreed that if he defaulted and did not deliver the ship, he would be liable to a penalty double the amount of the loan. When the case came to trial, Parmeniscus was still somewhere in the Mediterranean with the ship (Harris 1989). Harris (p. 340) writes that three general practices of providing maritime loans were in existence:

• When a man lent money to a merchant for a trading voyage, it was customary

for the merchant to pledge his ship as security for the loan (Dem., Ag. Zen., 32.14; Dem., Ag. Lac., 35.33; Against Dionysodorus, 56.3). • Instead, the lender could pledge the cargo on it as security (Dem., Ag. Zen., 32.12; Against Phormio, 34.6; Ag. Lac, 35.10; Against Callippus, 52). • If the merchant defaulted on the loan, the lender could seize the ship or the cargo and sell it in lieu of repayment (Demosthenes, Against Apatourius, 33.6; Ag. Lac., 35.12). The above ancient sources also highlight the high level of specialization that had developed regarding the legal coverage of international commercial transactions, as a forerunner of the corresponding institutions developed since the late medieval period and early modern Europe onward. In the following passage, Demosthenes (Against Dionysodorus, 56.1–2) reveals an additional set of intertemporal axioms regarding financial/commercial transactions: I’m a shareholder (koinonos) in this loan. It happens to us, who have the profession to place our property in the sea trade and to give our money to foreign countries8 to know clearly that the borrower has greater benefits than us. (His transactions) are taking place in reliable currency (argyrion phaneron kai omologoumenon) in the pre-agreed sum of money and then he signs/declares through a grammateidion which costs two chalkoi or in a small biblidion,

172  The Financial Institutions of the Athenian Economy that he will return the money he borrowed as agreed.9 We10 do not promise that we will give him the money but we did it at once. What, then, do we rely upon, and what security do we get when we risk our money? To you your honorary judges, and in your laws, which demand that the agreements that one makes voluntarily (of his own free will) with another to be valid (emphasis by the author). But I think that neither the laws nor the syngraphe has any other benefit if the borrower is not completely honest and does not experience one of the two feelings of fear towards you and shame towards his lender. At first, I focus on the issue of “reliable currency,” as mentioned in Line 5. Demosthenes states that transactions are taking place in a reliable currency, the Athenian drachma, as will be further analyzed in detail in the following chapter. Furthermore, Demosthenes, in Line 1, uses the word koinonos to characterize a bank shareholder. This word derives from the word koinonia, meaning society. This means that the ancient Greeks equated this kind of profession with a form of special social networking. To be an efficient koinonos, one should have been able to establish effective social networks of acceptance and mutual respect with at least a section of the Athenian merchant class and with the Athenian (and perhaps also the international) emerging mercantile class of the times, in general. Moreover, in the same passage, Demosthenes describes the perils of international commerce of his time: an investor/bank-shareholder is a risk-taker because he stands to lose his investment if the other party (the merchant) does not fulfil his promise to redeem his contract agreement to repay the lender with interest. In order to secure his rights, the investor/shareholder-banker demands a written contract (syngraphe) regarding the loan he offers, signed by the parties, both the lender and the borrower. By referring to the grammateidion and biblidion,11 Demosthenes describes the standard documents that were used during the preparation of a written contract (between a merchant with a banker or investor to borrow money), which was a common practice during his times. This contract certified the agreement between the parties. In Section 5.1, evidence was provided that such documents were commonly used and could even be found and purchased in the agora; thus, they were not exclusive to bankers, lawyers, etc. In case of disputes, the two parties could apply to courts as litigants. As will be argued in Section 7.2, the charge of two chalkoi was a very small amount, something akin to what is characterized today as, say, stamp duty costs. Demosthenes also emphasizes that the smooth operation of the economy is secured through the important intervening role of the courts but also by the lawabiding mentality of the merchants themselves. Lines 10–16 in the above passage of Demosthenes is tangible proof regarding the issue of enforcing commercial contracts through the law. This is why Demosthenes implies that in addition to the protection offered by the law to the signed contracts, a critical element for the success of this type of transaction is the borrower’s compliance both with the law and the courts. In other words, Demosthenes calls for a pacta sunt servanda regarding commercial agreements under financial transactions.

The Financial Institutions of the Athenian Economy  173 In another passage (Ag. Zen., 32.21), Demosthenes refers again to maritime lending partners, identifying them again as koinonoi (the plural of koinonos). Another almost similar interesting case is provided by Demosthenes (Ag. Lac., 35.10–12) in which he describes in detail a written contract regarding a maritime loan that involves two lenders and two borrowers. In particular, Demosthenes writes (reproduced by Bresson (2016, 281–282) – see also Christesen (2003, 50-51)): Androkles from the deme of Sphettos and Nausikrates from Karystos lent Artemon and Apollodoros from Phaselis 3,000 silver drachms for a voyage from Athens to Mende or Skione, and from there to Bosporos, and then, if it pleased them, as far as Borysthenes by sailing along the coast at the left, with a return to Athens. The interest is 225 per 1,000 and, if they sail only after the rising of the Guardian of the Bear star [Arktouros] to go from Pontos to Hieron, 800 per 1,000. The loan is guaranteed by 3,000 amphoras of wine from Mende, to be loaded in Mende or Skione, on a ship with twenty oars commanded by Hyblesios, the said security reserved free and clear, without being subject to any debt present or future. The merchandise bought in Pontos, along with the product of the sale, will be brought back to Athens on the same ship. If they arrive safe and sound in Athens, the borrowers will pay the lenders the capital and interest within twenty days after their arrival, without any deduction other than what has had to be jettisoned by common agreement among the passengers and any ransom paid to the enemy, all other losses to be borne by the borrowers. The security reserved will be made available to the creditors free and clear of any right of seizure, until the capital and interest have been paid in conformity with the contract… If the payment is not made within the agreed time, the creditors will have the right to mortgage the security reserved and to sell it at the going rate. If the price is insufficient to reimburse the creditors for the sum that they are supposed to receive in accord with the terms of the contract, their right of seizure will be extended to all the other property of Artemon and Apollodoros, both terrestrial and maritime, wherever it might be, as if there had been a court judgment against them and the deadline has passed, the said right belonging to both creditors. If they do not pursue their voyage to the end, they will stop in the Hellespont ten days after the rising of the Dog Star (Sirius) and will unload the merchandise in a place where the Athenians cannot be the object of reprisals; they will return from there to Athens and will pay the interest specified in the contract the preceding year. In the event that the ship on which the cargo will be transported is wrecked, if it is possible to save the merchandise that is affected by the loan, the part saved will belong to the creditors undivided. With regard to all these points, the present agreement supersedes any contrary rule. Witnesses: Phormion, from the deme of Piraeus, Kephisodotos from Boiotia, Heliodoros from the deme of Pithos. Testimony: Archenomides, son of Archedamas, from the deme of Anagyrous, testifies that a contract has been deposited with him by

174  The Financial Institutions of the Athenian Economy Androkles, from the deme of Sphettos, Nausikrates from Karystos, Artemon and Apollodoros from Phaselis, and that he still holds this document. – Read also the testimony of those present. Testimony: Theodotos, a foreigner with equal tax rights [isotelēs], Charinos, son of Epichares, from the deme of Leukonoe, Phormion, son of Ktesiphon, from the deme of Piraeus, Kephisodotos, Boiotian, Heliodoros, from the deme of Pithos, testify that they were present when Androkles loaned Apollodoros and Artemon 3,000 silver drachms, and that they know that the document was deposited with Archenomides, from the deme of Anagyrous. The analytical reproduction of this contract by Bresson proves that these contracts were very detailed (at least for the standards of the time) so that they were characterized by complete sufficiency of information. This proves that the Athenians also understood another modern practice: that signed contracts that are poorly worded, ambiguous and leave out important things are deterrent to commerce and international transactions. Nobelist Oliver Hart has raised this issue emphatically (see Hart (2017). Bresson (2022, 226) adds that these contracts could be recorded by trusted individuals playing the role of notaries, but as early as the Classical period, and more systematically in the Hellenistic period, these contracts could be kept in city archives or in temples. Having taken all the above into account, one can come to the following assumptions. The first is that the Athenians’ choice to experiment and develop partnerships was related to the extended financial requirements for the successful conduct of international trade of the time. If bankers-investors did not form partnerships with each other to pool financial clout, they might not have managed to cover the financial needs of an extended and rising volume of international commerce; creating a common pool reduced the risk to each participating partner. I believe that F. Knight’s ([1921], 1965) characterization of entrepreneurs as “undertakers of risk and uncertainty” also applies for those merchants described here. Table 6.1 shows the two-step process that the Athenian bankers followed to establish corporatism among them. In the first step, two or more Athenian bankers decide to cooperate to satisfy the financial needs of their customers/borrowers. But as soon as this cooperation proves efficient (profitable) for them, they decide to join Table 6.1 The two-step process toward the creation of the Athenian joint-stock companies in banking Step 1

Step 2

Partnership between Athenian bankers is established

Partnership is successful and becomes permanent

The Financial Institutions of the Athenian Economy  175 forces and make it permanent (Step 2) by creating a banking institution with more than one partner to increase their financial strength and assets as a whole, their lending potential and their long-term profits in common. These agreements were backed up by contracts under the aegis of the Athenian legal system. 6.3.2 Joint-stock Companies in Other Relative Areas

Primitive versions of JSCs to make a profit were developed not only regarding banking services but also in other areas of economic interest. According to Christesen (2003), van Alfen (2011) and Bitros et al. (2020, 24), among others, mining operations for extracting silver from the Laurion mines were run almost exclusively by private contractors, individuals or consortia of shareholders (in other words, a form of JSC) who won the rights to exploit specific veins of the mines by participating, from time to time, in an auction conducted by the board of poletai (see further in Section 8.3) under the supervision of the Athenian Council. In a broader sense, Xenophon (W.M., 4.3, 4.27–32) also realized the importance of sharing corporate risk with more than one person through partnership. He proposed:

• The purchase of slaves by the state and leasing them to private consortia for exploiting the silver mines in favor of the state.

• The formation of a state company for the discovery of new silver mines. • The cooperation between the private consortia for exploiting the silver mines and this state company (this is implied).

Xenophon (ibid., 4.49–50) also believed that such a policy would benefit the whole region of Laurion. It would lead to an increase in the number of employees, which would result in increasing commercial activity in the regional market of Laurion. In turn, this would lead to an increase in the local authorities’ revenues, in part, due to the lease of public housing. At the same time, owners of real estate in the region would also benefit from the increase in the rental prices of the mines’ employees’ housing. To be done properly, all this could demand infrastructure works such as walling southeast Attica so that slaves would not escape from the mine installations and for the mines to be protected against foreign raids (ibid., 4.43–44). It may not be an exaggeration to argue that J.M. Keynes would emphatically accept Xenophon’s plan and shake his hand if he could travel back to fourth-century Athens with a time machine!12 Xenophon’s plan could be seen as a development project of Keynesian inspiration, by exhibiting how the activation of what, under a Keynesian perspective, is explained as the aggregate demand mechanism could boost the development of an economy at a regional or state level. Following the above passage of Xenophon, Hypereides (In Defence of Euxenippus, 4.35–36) provides evidence of a man, Epicrates of Pallene, a very rich Athenian who had a share in a particular mine. He mentions that Epicrates and the rest of the shareholders had extended (illegally) their exploitation of land beyond the legal territorial boundaries of that particular mine. This landed them in court. Οbviously,

176  The Financial Institutions of the Athenian Economy Epicrates and his partners had trespassed on land whose exploitation had been won by another party or parties at auction, an act ratified by the board of poletai. Another form of JSC had to do with the ownership of ships. Basing himself on Demosthenes (Ag. Lac.), Cohen (1992, 153) argues that ships could be owned in partnership. This became necessary because the cost of buying and operating a merchant ship to transport goods was quite high; only a few merchants or wealthy aristocrats could assume such costs exclusively. Moreover, there was always the risk of a maritime accident, e.g., a collision or fire, resulting in the loss of both the ship and the goods carried on it. To limit the uncertainties from such (possible) events, those engaged in shipping (not necessarily being the captains themselves) could resort to either insurance or becoming co-owners of a merchant ship. These two options constitute intertemporal practices. Harris (1989) believed that the Athenians lacked the modern legal notion of partnership or corporation because, according to him, Athenian law concerned solely individual persons engaged in commercial activities and did not recognize the legal existence of collective entities. This is because, according to him (p. 341), Athenian law did not consider that joint borrowers could form a single partnership, thus, being jointly liable for any breach of agreement. Harris adopts the earlier views of Mitchell ([1940] 2014, 31) and Finley (1952) in this regard. By contrast, Harrison (1968, 242), based on Aristotle (Nic. Eth., 1163a), refers to koinoniae chrematon which, according to him, were familiar in fourth century Greece. This phrase means something like “money partnerships.” Engen (2010, 84) adds that koinoniae were common in maritime trade in which they were used to raise capital to cover the costs of acquiring cargo in foreign ports (purchase of the cargo, transportation and duties/taxes). What is of more importance from this particular ancient passage are Lines 20–21, in which Aristotle refers to the issue of “companionship” as it is connected with business relations. He writes: For men think that it ought to be in a friendship as it is in a business partnership, where those who contribute more capital take more of the profits (emphasis by the author). This description of Aristotle shows the logic under which partnerships functioned in Athens: those who contribute more capital to the company automatically had access to larger profit shares. Athenian JSCs followed the intertemporal business principle that the percentage of profits of a shareholder is determined by the percentage of his participation in the business activity. The same is described in Politics (3.1280a. 27–29), in which Aristotle states that: In a partnership with a capital of 100 minae it would not be just for the man who contributed one mina to have a share whether of the principal or of the profits accruing equal to the share of the man who supplied the whole of the remainder (emphasis by the author). Furthermore, in (Eud. Eth., 7.1242b) Aristotle refers again to “partnerships” in general but also specializes to the economic background of some of such partnerships. He argues that:

The Financial Institutions of the Athenian Economy  177 for in fact it happens in this way in other associations too – sometimes the shares are numerically equal, sometimes proportionally: if the parties contributed a numerically equal sum of money, they also take a share equal by numerical equality, if an unequal sum, a share proportionally equal (emphasis by the author). Acton (2014, 27) accepts such an interpretation when he writes that the Athenians developed koinonia or partnership agreements to define profit-sharing arrangements, and many relative examples can be verified in mining and in maritime lending. These primitive versions of business partnerships evolved mainly during the Hellenistic period. Romans further developed them through the so-called societas. Manning (2018, 253) characterizes them as “national groups of traders.” Among them, Egyptian and Tyrian groups were already attested in Athens in the late 330s. Gabrielsen (2001, 167) adds that the Hellenistic koina were not related only to religious activities but also to military (naval) functions, trade and lending activities. In addition, Demosthenes (Against Pantaeteneus, 37.4–6) argues that Pantaetenus, an investor, bought an ergasterion in Maroneia at Laurion from Telemachus, paying 9,000 drachmae. By ergasterion, he meant a site mining silver. That an investor could buy (or sell) a mining installation already in operation provides further arguments that the above discussion about JSCs is valid. 6.4 The Institutional Mechanisms for Financing State Needs Very important contributions on the issue of the Athenian public budget and finances are provided by Andreades (1933), Samons (1993, 2000), Rhodes (2013), Pritchard (2015) and Bitros et al. (2020), among others. Contrary to the modern practice of financing the private sector and trade through private banking services, there was no provision for the state to borrow money from private banks (Kyriazis 2009, 123). However, wealthy individuals could lend money to a state as a whole in some cases, especially during the Hellenistic period. The Athenian state raised funds to cover the annual state needs mainly through three channels:

• The Demosion fund (Demosion). • The Treasury of Delos or Allied Fund (AF). • The treasuries – temples of Athena (TTA) and the other gods (TTGs)13 6.4.1. The Demosion Fund (Demosion)

Perhaps as early as the late sixth century, if not, in fact, earlier, Athens had a state treasury known as the Demosion, meaning public fund (Samons 2000, 56). Thucydides explicitly mentions its existence (6.31.3–5). Demosion collected fines, domestic taxes, rents and remittances from the leasing of public real estate or land to individuals (such as silver mining in Laurion). The revenues from the mines at Laurion accounted for a significant portion of remittances. The Demosion covered

178  The Financial Institutions of the Athenian Economy the costs of running the government, i.e., public salaries, including pay for juries and payments for the construction of new triremes.14 Aristotle (Ath. Const., 47.5), Rhodes (1972, 98), Samons (2000, 55–69), Fawcett (2016, 177–178) and Blok (2017, 87) argue that the staff of the Demosion that supervised the collection of the above remittances were called the apodektai (receivers), a group of ten financial officials, each one appointed by lot from each tribe. In other words, they were responsible for allocating funds from a variety of public administration authorities that were then used as state revenues. The duration of these officials’ term was short because their access to the treasury may lead to corruption; thus, they served only for the duration of one prytany (IG I3 73.224). As an institution, the apodektai appeared after the Cleisthenes’s reforms and replaced the kolakretai who had similar duties till that time. The kolakretai institution was already in existence during the time Solon performed his reform project. He did not perform any changes regarding their duties (Arist., Ath. Const., 7.3). It appears that the kolakretai were not completely abolished during the Classical times. They became responsible for the meals in the Prytaneion, and Rhodes (2013, 209) adds that in the second half of the fifth century, they were the principal spending officers of the Athenian state. This means that, as Pritchard (2015, 81) and Blok (2017, 87) argue, the apodektai acted as collectors of the above remittances (annual public revenues), and the kolakretai were entrusted to distribute them to the various archai (state services) for paying the misthos (a wage, salary or payment) of their staff. Samons (1993, 2000) accepts this interpretation. The traditional view is that the kolakretai were abolished in 411 (Pritchett 1977, 295). Pritchard (2015, 81) writes that they were replaced by other officials. Table 6.2 explains the above evidence by matching dates to institutional changes. Rhodes (1972, 99, 2013) and Hansen (1991) explain that this distribution procedure of public money was called merismos, probably introduced in the law code of 403/402 BCE. The first extant reference to merismos is based on an inscription of a decree (RO 19) dated 386 BCE. The committee of the board of poletai had to transfer the annual remittances they received to the Demosion. This view is reinforced by Fawcett (2016, 177–178). As will be further explained in Section 8.2, the poletai were also responsible for setting the tax-farming agreements and collecting this kind of revenue. Thus, the Demosion was the fund from which the state covered a significant part of its public expenditures, such as government administrative expenditures, the salaries of civil servants (known as the archai) and judges, the cost of building the triremes and the Table 6.2 The institutions of collecting and distributing the Athenian state revenues Year (BCE)

Collecting State Revenues (public revenues)

594–508 Kolakretai 507– ca. 418–415 Apodektai 414–323 Apodektai

Distributing State Revenues (public expenditures) Kolakretai Kolakretai Other magistrates

The Financial Institutions of the Athenian Economy  179 reimbursement of crews (Samons 2000, 55–69). That’s why Rhodes (2013, 210) characterized it as a “central treasury.” Samons (pp. 55–56), contrary to earlier views of historians, argues that this fund was not located in the Acropolis, at least for the fifth century. Andreades (1933, 320) argues that during the fifth century, any annual surpluses of the Demosion were granted to the TTA. However, during the fourth century, any annual surpluses of the Demosion were granted to either the Theorikon and/or Stratiotikon funds (McAuley 2013, 183; Blok 2017, 89).15 Samons (2000, 61, 70), in general, believes that the Demosion did not collect significant sums of money between early to mid-fifth century and that any surpluses it gathered were transferred to other treasuries (p. 70, ft. 198). Samons’s (1993, 2000) research is remarkable, but I am not convinced on this particular point. For example, Gomme (1953/54), by interpreting a part of the famous Kallias Decree (codified as IG I3 52A), signed probably between 434/433 BCE, argues that the Demosion transferred 3,000T to the TTA at that period. Samons (2000, 114–120) rejects such a view because he believes that the Demosion could not have managed to progressively store such a large amount of money. I believe that, in all probability, Samons’s view is not correct on this particular point. First, because, as already argued, the Demosion collected fines, domestic taxes, rents and remittances from the leasing of public real estate or land to individuals (such as silver mining in Laurion). And although cliometric data for performing a more secure estimation are missing, it cannot be denied that these sources of state revenues should have been quite significant. Second, I am quite convinced by Andreades (1933, 320) who writes specifically on this issue that: The surpluses that thus piled up in the Athenian budget were not placed in the public treasury16 but were given to the treasury of Athena, from which the state could take them only in the form of a loan. This procedure, which has surprised many, was prompted by political prudence; the difficulty does not really lie in the forming of a treasure but in the moderate use of it, and particularly in its maintenance or preservation; the Athenians, as if defending themselves against themselves through the intervention of the goddess, placed obstacles in the way of a wasting of the surpluses and obligated themselves to a restoration of the sums spent. As a matter of fact, thanks to these measures, in spite of the great public works that had been executed, the treasure amounted at the outbreak of the Peloponnesian War to about 6,000 talents. In actuality, Andreades argues that the Athenians were exploiting public money with prudence to avoid any unnecessary waste. Gomme (1953/54) accepts Andreades’s interpretation. This is an intertemporal axiom of high importance; a mismanagement of the public treasury by a state can lead to a serious economic recession in the long run, like what happened in the modern Greek economy during the whole 1981–2010 period that finally led to the imposition of the so-called memoranda by the International Monetary Fund (IMF) and the European Union (EU) for the 2010–2018 period.

180  The Financial Institutions of the Athenian Economy 6.4.2 The Treasury of Delos or Allied Fund (AF)

The second important treasury was that of Delos or the Allied Fund (AF). It was created in 478 BCE and was involved in collecting taxes (known as phoros) from the city-states allied with Athens to finance the defense strategy against the Persian Empire (or any other) threat (Figueira 1998, 269, 2022; van Alfen 2011, 6; Pritchard 2015, 97). Its main staff was comprised of the so-called hellenotamiai, ten Athenian citizens elected by lot, with their main responsibility to be the collection and the supervision of the allied states’ financial contributions. This institution was sustained until the end of the Peloponnesian War in 404. Athens’ defeat led to the dissolution of the Athenian Alliance and the AF. The duties of the hellenotamiai included the management and the protection of the allied funds, compiling tax lists and disposing of these funds in the event of war (Pritchett 1977). They also accompanied the Athenian armed forces on their campaigns to cover related expenses. To ensure the prestige of their institution, in the event of any corruption or embezzlement, the penalty was the severest of all – to drink hemlock. In 454 BCE, after the proposal of Samians, the AF and the hellenotamiai were transferred from Delos to Athens in the Parthenon of the Acropolis. This move may have been related to the Athenian defeat in Egypt, but there is no doubt that it was certainly related to the hegemonic role that Athens had gradually assumed within the Alliance (Figueira and Jensen 2019). Although Samons (1993, 135, ftn. 25) expresses some doubts as to the exact location of the AF in Athens, most historians believe that its seat was in the Parthenon in the Acropolis (see e.g., Pritchett 1977; Blamire 2001, 106–107; Kallet 2007, 87; Rhodes 2013, 213). This also means that the tributes paid by the allies to the AF, known as aparchai, were collected at the Acropolis (Figueira 1998, 554; Blok 2017, 215).17 Part of this money was used to maintain and repair public buildings. At first, the allies paid 460T to the AF, which then increased to 1,000T, a very large amount of money (Thuc., 1.96). This significant rise can be seen also as an indication of rising prosperity within the alliance. The accumulated funds of the Athenian Alliance were transferred in one of the chambers of the Opisthodomos, a part of the Parthenon building complex which is located at the backside of the famous Temple of Athena Parthenos (Blamire 2001, 101). It is also confirmed that one-sixtieth of the aparchai were transferred to the TTA (Samons 2000, 70–78; Blok 2017, 89). The remaining amount of the phoros was deposited in the AF’s treasury housed in Opisthodomos (IG I3 52A13–18). What is crucial, but also very obscure in the bibliography in terms of this discussion, is to define what happened i) in the event that the defense budget exceeded that of the annual AF revenues and ii) the inverse case, that is, in the event that annual AF revenues covering the defense budget exceeded war expenses. In case of i), the weakness of the AF to cover the war expenses of Athens was covered by the Athenian state by borrowing from the TTAGs and mainly from the TTA (see below in 6.4.3). In case of ii), authors such as Stevenson (1924), Ferguson (1932) and Blamire (2001, 109) believed that these remittances were

The Financial Institutions of the Athenian Economy  181 granted to the TTA at the end of each financial year. Kallet-Marx (1989) does not accept this. French (1964, 101–102) writes that these surpluses could be used for the restoration of Athens’ sacred or public buildings in general; for that purpose, a special public fund was instituted. Regarding this, Isocrates (On the Peace, 8.82) argues that any surpluses from the AF were used to finance theatrical performances such as those at the Festival of Dionysus. But probably he makes a mistake on this because it is known that such a task was undertaken by the choregoi (sponsors) of the theatrical plays. Samons (2000, 70–83) and Blamire (2001, 5; based on IG I3 52A, B), add that occasional fund transfers took place from the hellenotamiai to the TTA. Notably, they refer not to the one-sixtieth of the aparchai but to additional remittances. Having taken all the above into account, I believe that there was always the possibility that AF remittances could be transmitted to the TTA, depending on the situation. And these remittances were then considered a part of the Athenian annual public revenues. This is, in fact, another very difficult issue (of the many regarding the Athenian public finance) that needs careful treatment. Specific evidence provided by Plutarch (Per., 12) and by three inscriptions18 led various scholars to argue that, in addition to the one-sixtieth of the aparchai, the hellenotamiai made an annual “grant” of 200T to the TTA and a further annual grant to the TTAGs, and this implies that this large amount of money was actually added to the Athenian state revenues for all the 448–434 period which reached 3,000T. But Kallet-Marx (1989) rejects such a view. However, she admits that, indeed, a part of the Allied money was used in the construction of the Parthenon, but the amount should be considered much smaller than what is generally believed. I believe that a correct synthesis of these two opposing views is that the Allied states were granting 400T a year to the AF, and this sum was not typically added to the Athenian budget, as it was used (in principle) for covering only the Athenian war expenses. The Athenian authorities could not officially add this money in the Athenian state budget because such an act, in purely typological terms, would be considered a theft of the allies’ money and, as Samons (2000, 110) correctly writes, such an act could enrage and insult the allies of Athens. This is something that the Athenian policymakers would like to avoid so as not to displease their allies. In fact, the reason for the dissolution of the Second Athenian Alliance was the excessive financial demands of the Athenians from their allies, which led some strong allies, such as Chios, Rhodes, Cos and Byzantium, to apostasy by also overthrowing their democratic governments and breaking away from the League. This finally led to the disastrous Social War of 357–355 for Athens. Another important point to bear in mind is that between 415 till 404, the period in which the Peloponnesian War was lost, the Demosion was merged with the AF (Samons 2000, 23, 120, 295). Thucydides provides proof of this when he argues that the finance of the fleet that took place in the Sicilian Campaign was covered by the Demosion. This could have happened only if the Demosion was backed up by a large pool of available cash, such as a synthesis of both the Demosion and the AF funds. Thucydides (6.31.3) provides evidence on this.

182  The Financial Institutions of the Athenian Economy 6.4.3 The Treasuries – Temples of Athena (TTA) and the Other Gods (TTGs)

The third important mechanism from which the state could cover a portion of its financial needs was the so-called tamia, meaning the treasuries – temples of Athena and the other gods (TTAGs), which were neither private nor “purely” public institutions and, institutionally speaking, could be characterized as “public legal entities” or quasi-state institutions (QSIs); that is, they, among others, conducted specific functions/services in favor of the state (Bitros et al. 2020). TTAGs included all treasuries – temples throughout all the demes of Attica. They were divided between the treasuries – temples of Athena (TTA) and the treasuries – temples of the other gods (TTGs) such as those dedicated to Nike, Hermes, Artemis, Aphrodite, Apollo and Nemesis in the area of Rhamnous near Marathon and one dedicated to the goddess Artemis in Brauron on the southeast coast of Attica. The administrators of the TTAGs were called tamiai (treasurers). Each of these treasuries was administered by a board, and there was probably a chairman in each of these boards (Samons 2000, 38). During the fifth century, the TTA tamiai had a single term, but later it was expanded to four years for the time that intervened between two Great Panathenaia festivals. Inscription IG I3 4B, one of the oldest Athenian inscriptions (possibly from 485/484 BCE), outlined the duties of the board of treasurers in managing the sacred area of the Acropolis. Aristotle (Ath. Const., 47.1) implies that, in his days, although the law required the TTA treasurers (one from each tribe) to be from the pentacosiomedimnoi class, in practice, men from lower social classes could be also appointed to serve at that post. Hansen (1991, 50, 107) and Johnstone (2011, 197, ftn. 35) agree with this interpretation. According to von Reden (2010, 162), the assets of the TTAGs increased from voluntary dedications of cash and other precious metal items, proceeds from the sale of confiscated property, penalty payments for breach of secular or sacred law, fees for cult services, public taxes, revenue from interest-bearing loans, rents of land and houses and the sale of sacred property such as hides of sacrificial animals. The treasuries – temples of Attica, Delphi and Delos attest to the vast resources some temples amassed in their treasuries. Furthermore, offers from the devotees and private and public benefactors increasingly provided resources for temple construction to enhance their political prestige. TTAGs also collected money from the payment of fines, the rental of public property owned by the state and even from private donations (Marcaccini 2015). Ferguson (1932), who exclusively studied the TTA’s workings, as well as other authors such as Samons (1996, 95) and Sassu (2010, 248, 252, 256) have provided strong arguments that the TTA was much more abundant in the first half of the fifth century than is usually thought. Its property contained precious items (such as furniture, clothes, coins, the chryselephantine statue of Athena and other statues, jewels, musical instruments, containers, ritual objects and wreaths). In principle, all these belong to the deity who owned the area; thus, they were not state property. The TTA, mainly, but also the TTAGs, in general, were also assigned to collect various remittances on behalf of the state such as confiscations, spoils, rents on

The Financial Institutions of the Athenian Economy  183 sacred land and war indemnities (including the one-sixtieth of the aparchai collected by the TTA). By 434/433 BCE, the Parthenon on the Athenian Acropolis housed a large amount of such money. But, as already mentioned, far from these remittances, the TTAGs were, in principle, autonomous economic units that generated incomes for themselves, and this improved monetary circulation at Athens (Von Reden 2010, 164; Sassu 2010, 247). Regarding the running expenses of the TTAGs, Migeotte (2009, 48) writes that a relatively large workforce, mostly composed of slaves – both public and sacred – was employed in the TTAGs with various duties such as the upkeep of places (buildings, streets, porticoes), the running of cults (daily manual tasks) and administrative routine (keeping archives, collecting taxes and so on). Von Reden (2010, 164) writes that those in charge of sacred funds (hieropoioi, tamiai and epistatai) also had to cover the high maintenance costs of their temples, such as construction and repair of temple buildings, wages and the feeding of personnel and animals. Sassu (2010, 248) adds that these activities involved a significant number of employees such as architects, sculptors, painters, artisans, masons, sacred personnel and musicians whose compensation, in the form of salaries, constituted a large share of the sanctuary operating payments. Henceforth, one could argue that the TTAGs, along with hoarding financial resources, created job opportunities, thereby fostering economic prosperity. The above evidence means that managing the TTAGs required prudence so that their operating costs did not exceed their revenues. Their managers were subjected to strict auditing to ensure the proper administration of these large sums of money in favor of the general prosperity of the Athenians. Because of this, Sassu (2010), Von Reden (2010, 164) and Marcaccini (2015, 530) add that all the sacred funds were obliged to publish annual accounts regarding revenues, expenses and cash, as is known from the decree of Kallias (IG I3 52A, Lines 24–27) as well as to prepare detailed reports on the proper management of their revenues and on the real value of their assets. Such reports are attested in inscriptions (IG i3 52B, IG i3 317, 318; IG i3 343, 344) (Samons 1996, 1997).19 Schaps (2022, 242) adds that the tamiai inscriptions found preserve precious information on prices and wages. Samons (1996) defines this auditing procedure of TTAGs accounts as logos. The whole supervision of the working of these categories of state funding mechanisms was entrusted to the Council (IG I3 52.A9–12; Pritchard 2015, 31). The TTAG’s remittances were offered as loans (mainly) to the state. Τhus, the TTAGs acted as credit banks to deal with state emergencies. In the beginning, there were separate sacred funds which were managed by their tamiai administrators autonomously; the TTA for the treasures of the Parthenon, which was founded before democracy, and the TTGs for the treasures of the other temples in Attica. Samons (2000, 114) believes that the TTGs functioned under a joint management (probably) from 432/431 onward. All the funds (TTAs and TTGs) were consolidated in 406/405, separated in 385/384 and permanently reunited in 346 (Rhodes 2013, 215). Papazarkadas (2011, 30) agrees that the merger took place sometime in the 340s but that the exact date of the merger has never been established on firm grounds. Rhodes (2013, 214–215) believes that, in technical terms, the TTGs were

184  The Financial Institutions of the Athenian Economy “swallowed up” by that of Athena. Hansen (1980, 161) believes that the TTGs were under a common administration, and after 346 BCE, the powers of this common administration were transferred to the TTA. Blok (2017, 88) argues that all these hieroi (sacred) treasuries were managed by the treasurers of the TTA since 406/405 and afterward. Samons (1993, 133) argues that it is likely that the practice of transferring remittances from other temples to TTA was eventually introduced, and this is reinforced by inscriptions IG I3 365, 369, 436ff referring to the years between 426–423 BCE. Perhaps this had to do with an effort for improving fund management as a whole. These different interpretations arise from some critical gaps presented in the primary ancient sources. Thus, in actuality, the TTA became a “mega-treasury,” which, as Samons (1993, 134) writes, to a great degree, functioned also as a state treasury, collecting a large source of state funds intended for various purposes, such as financing the Samian campaign or the Kerkyrean expedition as well as other military campaigns and building programs. This is, of course, true if the remittances of the AF, which typically did not include property of the Athenian state, are excluded. 6.4.4 The Opisthodomos of the Parthenon

The Parthenon was a complex including four temples, the Hekatompedos Neos, the Pronaos, the Parthenon and the Opisthodomos, which covered a large part within the Parthenon complex, as Images 6.1 and 6.2 denote. It occupied a large part of the Temple of the Parthenon. This seems logical considering the very large amount

Image 6.1  The backside of the Temple of Athena at the Parthenon in Acropolis with the Opisthodomos. Source: https://www​.stockfreeimages​.com​/16117411​/Parthenon​-Side​-Back​-view​.html.

The Financial Institutions of the Athenian Economy  185

Image 6.2  The Opisthodomos at the Temple of Athena on the Acropolis. Opisthodomos (O), Temple of Athena Parthenos (TAP), Pronaos (P). Source: Image prepared by the author.

of cash and treasures collected there. Based on Kallias’s decrees (IG I3 52A.15– 16, B.24–25), Samons (1993, 130, ftn 10, 1996, 96), Blamire (2001, 104–105), Marcaccini (2015, 515, ftn. 4) and Lykke (2017, 211) argue that on the right side of the Opisthodomos was the TTA chamber, while on the left, was the TTGs. This information is important in the sense that it relates to the previous discussion regarding the precise relationship between the TTA and the TTGs. The fact that there existed two treasuries, one on the left and the other on the right side of the Opisthodomos, suggests that while the assets from all treasuries throughout Attica were collected there as a whole and managed by the tamiai of the TTA, they were still considered as separate funds under central management. At least, this is my interpretation. What can be also deduced is that the Opisthodomos as a whole included three chambers which hosted three separate treasuries; i) that of the AF ii) the TTA iii) the TTGs. Andreades (1933, 320–321), Mattingly (1968), Samons (2000, 107), Gabrielsen (2013, 335) and Bresson (2019, 146), based on Thucydides (2.13.3–5), inform us that the Opisthodomos on the Acropolis, at its height, contained 9,700T, but gradually, this sum was depleted by the expenses for the construction of the Propylaea, the Parthenon (437–432 BCE) and other buildings, for modernizing the harbor of Piraeus and to fund the initial stage of the Peloponnesian War such as the cost of the siege of Potidaea (Samons 1993, 134–135; Blamire 2001, 99). These large sums of money in the TTA served as security for the polis in case of emergency. Below, I present a reconstruction of the information provided by Mattingly (1968) and Samons (1993, 135) regarding where the financial resources of Athens in 431 came from:

• Imperial revenues – 600T a year. As argued above, the AF transferred a portion of its remittances to the TTAGs as aparchai.

186  The Financial Institutions of the Athenian Economy

• The TTA – it had gathered 6,000T in coins and 500T in precious metal (spoils,

dedications, sacred vessels, etc.). It also housed a large amount of money collected from various taxes and annuities. These deposits were stored on the right side of the Opisthodomos. • Considerable funds from the other treasuries – temples. These deposits were gathered together and stored on the left side of the Opisthodomos. • 560T as revenues from the temple of Athena Parthenos itself. During times of war, the city-state of Athens could borrow from the TTAGs and, mainly, from the TTA. It is important to take into account that after the hostilities, these loans plus interest were repaid through budget surpluses (Samons 2000, 30–50). Of course, treasuries could only lend money from their surplus; lending allowed them to increase their revenue. This means that the managers of each separate treasury should have followed good administration procedures for every period of time. Although there is no tangible evidence, Blamire (2001, 109) writes that during the three financial years preceding the death of Pericles in the autumn of 429, the Athenians borrowed more than 3,800T from the TTAGs: 1,145T in 432/431, 1,370T in 431/430 and 1,300T in 430/429, respectively. Blok (2017, 87) argues that around 433/432, the Athenians decided on Kallias’s proposal to repay all the polis’s debts to the TTAGs plus accumulated interest by creating a new treasury. This important information essentially verifies that it was mandatory that any fiscal entity borrowing money from the TTAGs, had to repay them with interest. This is also verified by Thucydides (2.13.3–6) and Pritchard (2015, 98) and his interpretation on to the Kallias Decree. On this, Samons (1993, 130, ftn. 9; based on the inscription IG i3 369=ML 72) refers to an additional relative case during the Archidamian War (431–421 BCE, the first phase of the Peloponnesian War) in which the treasurers of the TTAGs made loans to the hellenotamiai and to Athenian generals for military operations. Such loans by the TTAGs to the state could be medium or long term. More specifically, until 427 BCE, the TTA lent money to the state at an interest rate of 6%. Samons (2000, 30–50), instead, has argued that this particular interest rate was 7%. But from 426 BCE onward, the interest rate was reduced to only 1.2% (Blamire 2001, 108–109). Neither ancient sources nor modern evidence explain this significant interest rate drop. I assume that it was a decision made by the Assembly through some law or decree to reduce the costs of funding the ongoing Peloponnesian War. In other words, perhaps in 426 BCE, the high cost of the war had led to a large accumulation of public debt since 431, and the Athenians decided to alleviate their borrowing costs to effectively subsidize the continuation of the war. My general conclusion is that the TTAGs functioned as financing mechanisms of the Athenian state in emergencies. The TTAGs did not “offer” or “grant” these funds but, rather, lent this money at a low interest rate to the Athenian state, which, in normal fiscal times, such as peacetime, had to pay back. Taking all the above into account, two issues are drawn as a conclusion: first, the TTAGs, as QSIs,

The Financial Institutions of the Athenian Economy  187 stored vast amounts of money, including a part of annual public revenues. The Athenian state had access to these funds when in need, e.g., during extraordinary situations such as financing a war. Blok (2017, 87) summarizes the above findings: By the mid-fifth century, Athens had a polis treasury (demosion) for which the apodektai received the money and the kolakretai made the expenses; a treasury of the Delian League managed by the Hellenotamiai; the money of Athena managed by the Tamiai of Athena; and numerous smaller treasuries of polis gods and goddesses, often with their own hieropoioi or epistatai. Rhodes (2013, 210) agrees with Blok on this. Second, in the Opisthodomos of the Parthenon, there existed three large chambers hosting, respectively, the treasuries of: i) the AF, ii) the TTA and iii) the TTGs. Thus, in general, the Parthenon stored huge sums of money. Table 6.3 lists the three categories of Athenian “megatreasuries,” as described in this section. Table 6.3 The role of the Athenian “mega-treasuries” Fund 1. Demosion Type of fund Location Financial means of the fund Role of the fund 2. AF Type of fund Location Financial means of the fund Role of the fund

Public institution Unknown It collected fines, rents and remittances from the leasing of public real estate or land It collected and then distributed a large part of public revenues to the various archai through the merismos procedure (see below about “ merismos”) “International” organization Parthenon (Opisthodomos) It collected the remittances by the allied city-states of Athens Covered expenses regarding military purposes, e.g., the financing of the Athenian fleet

3. TTAGs Type of fund QSI Location Parthenon (Opisthodomos) Financial means Beyond its own revenue from donations, this treasury collected (on of the funds behalf of the state) assets from various means such as: voluntary dedications of cash and other precious metal items; proceeds from the sale of confiscated property; penalty payments for breach of secular or sacred law; fees for cult services; public taxes; revenue from interest-bearing loans, rents of land and houses and the sale of sacred property, such as hides of sacrificial animals and revenues in kind; and war indemnities Role of the fund 1. TTAGs primarily acted as credit banks to deal (primarily) with state emergencies 2. TTAGs also acted as state treasuries by collecting various sums of money on behalf of the state, such as various taxes and annuities

188  The Financial Institutions of the Athenian Economy Table 6.4 Evolution and changes of mega-funds during the Classical period Timeline (479–416 BCE)

Timeline (415–404 BCE) Timeline (403–323 BCE)

Demosion Demosion was merged AF with AF Parthenon (TTA) and Parthenon (TTA) and TTGs TTGs

Demosion, Theorikon and Stratiotikon AF was abolished Parthenon (TTA) and TTGs

Table 6.4, which is based on Table 6.3, presents the three categories of institutions for the collection of the Athenian public revenues between two periods, 479–404 and 403–323 BCE, because after 404, the AF was abolished. During the fifth century, auditing of the magistrates of the TTAGs was undertaken by a committee known as the 30 logistai (30 accountants), a group of state accountants supervised all public magistrates upon completion of their duties (IG I³ 52.7–13; Arist., Ath. Const., 48.3). They also recorded the portion of aparchai paid to the TTA by the hellenotamiai. 6.4.5. Public Borrowing from International Banks and from Individual Private Investors

The final conceptual step in the above discussion concerns two more aspects of public borrowing. The first concerns the possibility for a city-state to borrow from treasuries – temples that were not within the boundaries of its territory. Gabrielsen (2008) and Migeotte (2009, 127) provide evidence that such “international banks” did exist but only during the Hellenistic period onward in cities such as Athens, Delos, Olympia, Tenos, Cos, Illion, Lampsakos and Miletus as well as in kingdoms such as the Ptolemaic Kingdom of Egypt. But it must also be noted that their predecessors were the Athenian TTAGs during the Classical period, which I defined as QSIs. These banks could not, of course, cover the wide range of services that modern international investment banks such as JP Morgan Chase & Co., Goldman Sachs, Morgan Stanley, UBS, HSCB and Barclays play. But what cannot be denied is that the first traces of such services (financing a nation’s needs through an international financial institution) have their origins (again) in Ancient Greece. Homer and Sylla (2005, 37) and Sassu (2010, 249) argue that in 377–373 BCE, 13 states borrowed (with a 10% interest rate) from the temple of Apollo at Delos, and only two proved completely faithful; in total, four-fifths of the money was never repaid. Thereafter, the temple preferred loans to individuals secured by land. The second aspect concerns the issue of state funding from the private sector. A city-state could borrow from individual private investors. Several such cases are known. For example, Homer and Sylla (2005, 37) mention that Demosthenes loaned money (one talent) to the city-state of Oreos at an interest rate of 12%.

The Financial Institutions of the Athenian Economy  189 In another case, dating somewhere between 319–318 BCE, a wealthy citizen of Plataea loaned a significant amount to the small town of Plantasa in Caria in Asia Minor (modern-day Akbük, Turkey). The creditor was an officer of Alexander the Great who probably wanted to invest his share of the booty acquired from the spoils of the Persian Empire. This description is important because it shows that, during the Hellenistic period, confirmed capital movements were taking place in the Hellenistic world. In another case, occurring between 230–210 BCE, a private investor named Eubolos, originally from Elateia, an ancient Phocian city, had loaned an amount of money to the city-state of Orchomenos, a member of the Boeotian League. It is reported that as a token of gratitude for the service Eubolos provided to Orchomenos, he was granted the right to graze his flocks on a parcel of the Orchomenos territory, with clearly defined rights of use of the specific land (Bresson 2007). Another characteristic example is that of the wealthy woman, Nicareta, mentioned in Section 5.11. These cases show that a city-state, and formally, the public sector, could borrow amounts of money from private investors during the Classical, but even more so, during the Hellenistic period. Notes 1 In their influential paper, North and Weingast (1989), among others, have analyzed the crucial role of credible commitment regarding the viability of a financial system. According to their analysis, which focused on the post-Elizabethan era in England, if a financial system is trustworthy to all parties involved, this will be beneficial for the economy in the long run. The opposite also applies. This is, of course, an intertemporal axiom. 2 Aristotle was against excessive profits from money lending with interest – that is, usury (Pol., 1258b). In general, he believed that lending money may corrupt people (Arist., Nic. Eth., 1121a–b). The views of Aristotle against usury significantly influenced Christian philosophers such as Thomas Aquinas and John Calvin. 3 There are various historical cases of debt repayment denial. A characteristic case is the Fugger bank, which made the strategic mistake of letting itself be too closely tied to the Habsburg dynasty. In England, the first official laws concerning bankruptcy were passed in 1542 under Henry VIII. On cases of bank failures, see Jönsson (2019). Another very characteristic recent example is the Lehman Brothers, the fourth largest investment bank in the United States (behind Goldman Sachs, Morgan Stanley and Merrill Lynch), whose bankruptcy, during the 2008 global financial crisis, happened, among other things, due to Lehman’s involvement in the subprime mortgage crisis. 4 This issue is elaborated on in the following section. 5 There is a view that even the word bank derives from Classical Greece, probably, from the noun pangos, which derives from the verb pignimi which means, bench. 6 Trapeza, in singular. 7 Later medieval JSCs include the Venetian colleganza and the Genoese Mahona of Chios in Greece (Puga and Trefler 2014). They were further developed during the early modern Europe period (1549–1789) in the United Provinces and England (Kyriazis et al. 2018; Economou and Kyriazis 2019). In antiquity, they were not called that, so the adoption of this modern term, if not used carefully, may raise objections regarding historical anachronism. 8 Demosthenes here implies that he is an investor in interstate trade.

190  The Financial Institutions of the Athenian Economy 9 Including the interest for borrowing those funds. 10 The investors/bankers. 11 Grammateidion was a small tablet baring a document. It could be a contract, or any notes, memo etc. Biblidion was a small book. 12 The only issue with which Keynes would disagree is the issue of using slaves as a workforce. 13 I collectively characterize all these treasuries as TTAGs. 14 See IG i3 63.4–5; Samons (2000), especially pp. 55–69; Papazarkadas (2011), especially pp. 10, 33, 277; Rhodes (2013, 209); and Pritchard (2015, 31). 15 For these two funds, see Section 8.3. 16 He means the Demosion. 17 The aparchai were related to the so‐called “first fruits.” It was a part of a traditional practice widely attested in the Greek world, which entailed offering firstlings to the gods from the produce of agriculture, hunting or fishing, ranging in scale from simple gifts to organized donations made in the context of the Eleusinian mysteries. Gift‐giving was one of the most common means of interaction between the Greeks and their gods. Individuals might also offer something to the gods to pray for success in an undertaking etc. The aparchai (“first fruits”) were related to agriculture. An extensive analysis on aparchai is provided by Jim (2014). 18 These include the so-called Papyrus Decree (Strasbourg Papyrus Graeca 84: Anonymus Argentinensis), the financial decrees of Kallias (IG I3 52) and the inscription recording Athenian expenses for the expedition against Samos in 440 (IG I3 363). 19 Samons (1996, 91) argues that these reports are conventionally divided into two main types: (i) “inventories” or annual lists of the treasure located in a particular repository and (ii) “accounts” or documents recording the receipts and expenditures (or loans) of the TTAGs over a given period. Samons adds that the publication of inventories of the TTA began in 434/433, as no examples of similar inscriptions dated earlier than that year have been found. This, however, means that future research may find inscriptions dated at even earlier times.

Ancient Greek authors (Perseus Digital Library) Andocides, On the Mysteries Aristotle, Athenian Constitution Aristotle, Eudemian Ethics Aristotle, Nicomachean Ethics Aristotle, Politics Demosthenes, Against Apatourius Demosthenes, Against Boeotus II Demosthenes, Against Callippus Demosthenes, Against Phormio Demosthenes, Against Dionysodorus Demosthenes, Against Lacritus Demosthenes, Against Pantaenetus Demosthenes, Against Zenothemes Demosthenes, For Phormio Isaeus, On the Estate of Cleonymus Plutarch, Pericles Plutarch, Solon Thucydides, Histories (The Peloponnesian War) Xenophon, Ways and Means

The Financial Institutions of the Athenian Economy  191 Modern authors Acton, P. H., (2014), Poiesis: Manufacturing in Classical Athens, Oxford: Oxford University Press. Amemiya, T., (2007), Economy and Economics in Ancient Greece, London, New York: Routledge. Αndreades, A. M., (1933), A History of Greek Public Finance, Cambridge, MA: Harvard University Press. Bergh, A., Lyttkens, C. H., (2014), ‘Measuring institutional quality in ancient Athens,’ Journal of Institutional Economics, 10(2), 279–310. Bitros, G. C., Karayiannis, A., (2008), ‘Values and institutions as determinants of entrepreneurship in ancient Athens,’ Journal of Institutional Economics, 4(2), 205–230. Bitros, G. C., Economou, E. M. L., Kyriazis, N. C., (2020), Democracy and Money: Lessons for Today from Athens in Classical Times, London, New York: Routledge. Blamire, A., (2001), ‘Athenian finance, 454-404 B.C.,’ Hesperia, 70(1), 99–126. Blok, J., (2017), Citizenship in Classical Athens, Cambridge: Cambridge University Press. Bogaert, R., (1968), Banques et Banquiers dans les Cites Grecques, Leiden: A. W. Sijthoff. Bresson, A., (2007), L’ Économie de la Grèce des Cites. Les Structures et La Production, Vol. 1. Paris: Armand-Colin. Bresson, A., (2016), The Making of the Ancient Greek Economy: Institutions, Markets, and Growth in the City-States, Princeton, NJ: Princeton University Press. Bresson, A., (2019), ‘The Athenian money supply in the late archaic and early classical period,’ Journal of Ancient Civilizations, 34(2), 135–153. Bresson, A., (2022), ‘Markets,’ in S. von Reden (Ed.), The Cambridge Companion to Ancient Greek Economy, Cambridge: Cambridge University Press, 221–236. Casson, L., (1971), Ships and Seamanship in the Ancient World, Princeton, NJ: Princeton, University Press. Christ, R. M., (2006), The Bad Citizen in Classical Athens, Cambridge: Cambridge University Press. Christesen, P., (2003), ‘Economic rationalism in fourth-century BCE Athens,’ Greece & Rome, 50(1), 31–56. Cohen, E. E., (1992), Athenian Economy and Society: A Banking Perspective, Princeton: Princeton University Press. De Roover, F. E., (1945), ‘Early examples of marine insurance,’ Journal of Economic History, 5(2), 172–200. Economou, E. M. L., Κyriazis, N. C., (2019), Democracy and Economy: An Inseparable Relationship Since Ancient Times to Today, Newcastle upon Tyne: Cambridge Scholars Publishing. Engen, D. T., (2010), Honor and Profit: Athenian Trade Policy and the Economy and Society of Greece: 415-3-7 B.C.E., Ann Arbor: University of Michigan Press. Fawcett, P., (2016), ‘When I squeeze you with eisphorai: Taxes and tax policy in Classical Athens,’ Hesperia: The Journal of the American School of Classical Studies at Athens, 85(1), 153–199. Ferguson, W. S., (1932), The Treasurers of Athena, Cambridge, MA: Harvard University Press. Figueira, T. J., (1998), The Power of Money: Coinage and Politics in the Athenian Empire, Philadelphia: University of Pennsylvania Press. Figueira, T. J., (2022), ‘Salamis as inflection point: Militarization, politicization, and democratization’, in E. M. L. Economou, N. C. Kyriazis, A. Platias (Eds.), Democracy

192  The Financial Institutions of the Athenian Economy and Salamis: 2500 Years After the Battle that Saved Greece And the Western World. Cham: Springer Verlag, 75–98. Figueira, T. J., Jensen, S. R., (2019), Hegemonic Finances. Funding Athenian Domination in the 5th Centuries BC, London: Bloomsbury. Finley, M. I., (1952), Studies in Land and Credit in Ancient Athens, 500-200 B.C. The Horos-Inscriptions, New Brunswick, NJ: Rutgers University Press. Finley, M. I., (1973), The Ancient Economy, Berkeley: University of California Press. Finley, M. I., (1983), Economy and Society in Ancient Greece, New York: Penguin Non-Classics. Finley, M. I., (1985), Ancient History: Evidence and Models, London: Chatto & Windus. Franklin, J., (2015), The Science of Conjecture. Evidence and Probability before Pascal, Baltimore: Johns Hopkins University Press. French, A., (1964), The Growth of the Athenian Economy, London: Routledge and Kegan Paul. Gabrielsen, V., (2001), ‘The Rhodian associations and economic activity,’ in Z. H. Archibald, J. K. Davies, V. Gabrielsen, G. J. Oliver (Eds.), Hellenistic Economies, London, New York: Routledge, 215–244. Gabrielsen, V., (2008), ‘Public banks in Hellenistic times,’ in K. Verboven, K. Vandorpe, V. Chankowski (Eds.), Bankers, Loans and Archives in the Ancient World, Leuven: Peeters, 115–130. Gabrielsen, V., (2013), ‘Finance and taxes,’ in H. Beck (Ed.), A Companion to Ancient Greek Government, Malden, MA: Willey-Blackwell, 332–348. Glotz, G., ([1926], 2013), Ancient Greece at Work. An Economic History from the Homeric Period to the Roman Conquest, London, New York: Routledge. Gomme, A. W., (1953/54), ‘Thucydides ii 13,3,’ Historia, 2, 1–21. Halkos, G., Kyriazis, N. C., (2010), ‘The Athenian economy in the Age of Demosthenes,’ European Journal of Law and Economics, 29, 255–277. Hansen, M. H., (1980), ‘Seven hundred Archai in Classical Athens,’ GRBS, 21, 151–173. Hansen, M. H., (1991), The Athenian Democracy in the Age of Demosthenes, London: Bristol Classical Press. Harris, E. M., (1989), ‘The liability of business partners in Athenian law: The dispute between Lycon and Megacleides ([Dem.] 52.20-1),’ The Classical Quarterly, 39(2), 339–343. Harrison, A. R. W., (1968), The Law of Athens: Property, New York: Oxford University Press. Hart, O., (2017), ‘Incomplete contracts and control,’ American Economic Review, 107(7), 1731–1752. Homer, S., Sylla, R., (2005), A History of Interest Rates, New Jersey: Wiley. Jim, T. S. F., (2014), Sharing with the Gods. Aparchai and dekatai in Ancient Greece, Oxford: Oxford University Press. Johnstone, S., (2011), A History of Trust in Ancient Greece, Chicago: The University of Chicago Press. Jönsson, S., (2019), A Comparative History of Bank Failures. From Medici to Barings, London, New York: Routledge. Kallet, L., (2007), ‘The Athenian economy,’ in L. J. Samons II (Ed.), The Cambridge Companion to the Age of Pericles, Cambridge: Cambridge University Press, 70–95. Kallet-Marx, L., (1989), ‘Did tribute fund the Parthenon?‘ Classical Antiquity, 8(2), 252–266. Knight, F., ([1921], 1965), Risk, Uncertainty and Profit, New York: Harper & Row.

The Financial Institutions of the Athenian Economy  193 Kyriazis, N. C., (2009), ‘Financing the Athenian state: Public choice in the age of Demosthenes,’ European Journal of Law and Economics, 27(2), 109–127. Kyriazis, N. C., Metaxas, T., Economou, E. M. L., (2018), ‘War for profit: English corsairs, institutions and decentralized strategy,’ Defence and Peace Economics, 29(3), 335–351. Leese, M. S., (2021), Economic Decision Making and Money-Making Strategies in Ancient Greece, Ann Arbor, MI: University of Michigan Press. Lykke, A., (2017), ‘Ritualizing the use of coins in Ancient Greek sanctuaries,’ Journal of Ancient History, 5(2), 205–227. Lyttkens, C. H., (2013), Economic Analysis of Institutional Change in Ancient Greece. Politics, Taxation and Rational Behaviour, London, New York: Routledge. Mackil, E., (2013), Creating a Common Polity: Religion, Economy, and Politics in the Making of the Greek Koinon, Berkeley, Los Angeles: University of California Press. Maloney, R. P., (1971), ‘Usury in Greek, Roman and Rabbinic thoughut,’ Traditio, 27, 79–109. Manning, J. G., (2018), The Open Sea: The Economic Life of the Ancient Mediterranean World from the Iron Age to the Rise of Rome, Princeton: Princeton University Press. Marcaccini, C., (2015), ‘The treasurers of Athena in the late 5th century B.C.: When did they take office?‘ Hesperia: The Journal of the American School of Classical Studies at Athens, 84(3), 515–532. Mattingly, H. B., (1968), ‘Athenian finance in the Peloponnesian War,’ Bulletin de Correspondance Hellénique, 92(2), 450–485. McAuley, A., (2013), ‘Officials and office-holding,’ in H. Beck (Ed.), A Companion to Ancient Greek Government, Malden, MA: Willey-Blackwell, 174–190. Migeotte, L., (2009), The Economy of the Greek Cities. From the Archaic Period to the Early Roman Empire, Berkeley, Los Angeles, London: University of California Press. Millett, P., (1991), Lending and Borrowing in Ancient Athens, Cambridge: Cambridge University Press. Mitchell, H., ([1940], 2014), The Economics of Ancient Greece, Cambridge: Cambridge University Press. North, D. C., Weingast, B., (1989), ‘Constitutions and commitment: The evolution of institutional governing public choice in seventeenth-century England,’ The Journal of Economic History, 49(4), 803–832. Ober, J., (2008), Democracy and Knowledge. Innovation and Learning in Classical Athens, Princeton: Princeton University Press. Ober, J., (2011), ‘Wealthy Hellas,’ Journal of Economic Asymmetries, 8(1), 1–39. Ober, J., (2015), The Rise and the Fall of Classical Greece, Princeton: Princeton University Press. Papazarkadas, N., (2011), Sacred and Public Land in Ancient Athens, New York: Oxford University Press, Inc. Prichard, D. M., (2015), Public Spending and Democracy in Classical Athens, Austin: University of Texas Press. Pritchett, W. K., (1977), ‘The Hellenotamiai and Athenian finance,’ Historia, 26, 295–306. Puga, D., Trefler, D., (2014), ‘International trade and institutional change: Medieval Venice’s response to globalization,’ The Quarterly Journal of Economics, 129(2), 753–821. Rhodes, P. J., (1972), The Athenian Boule, Oxford: Oxford University Press. Rhodes, P. J., (2013), ‘The organization of Athenian public finance,’ Greece and Rome, 60, 203–231.

194  The Financial Institutions of the Athenian Economy Roberts, K., (2011), The Origins of Business, Money and Market, New York: Columbia University Press. Rostovtzeff, M., ([1941], 1953), The Social and Economic History of the Hellenistic World, Oxford: Clarendon Press. Samons, L. J., (1993), ‘Athenian finance and the treasury of Athena,’ Historia: Zeitschriftfür Alte Geschichte, Bd., 42(2), 129–138. Samons, L. J., (1996), ‘The ‘Kallias decrees’(IG i3 52) and the inventories of Athena’s treasure in the Parthenon,’ The Classical Quarterly, 46(1), 91–102. Samons, L. J., (1997), ‘A note of the Parthenon inventories and the date of IG I3 52B,’ Zeitschrift für Papyrologie und Epigraphik, 118, 179–182. Samons, L. J., (2000), Empire of the Owl: Athenian Imperial Finance (Historia Einzelschriften), Stuttgart: Franz Steiner Verlag. Sassu, R., (2010), ‘Sanctuary and economics. The case of the Athenian Acropolis,’ Mediterraneo Antico, XIII(1–2), 247–262. Schaps, D. M., (2022), ‘Money, credit, and banking,’ in S. von Reden (Ed.), The Cambridge Companion to Ancient Greek Economy, Cambridge: Cambridge University Press, 237–249. Schefold, B., (2011), ‘The applicability of modern economics to forms of capitalism in antiquity. Some theoretical considerations and textual evidence,’ Journal of Economic Asymmetries, 8(1), 131–163. Shipton, K. M. W., (1997), ‘The private banks in fourth-century B.C. Athens: A reappraisal,’ The Classical Quarterly, 47(2), 396–422. Stevenson, G. H., (1924), ‘The financial administration of Pericles,’ JHS, 44, 1–9. Van Alfen, P. G., (2011), ‘Hatching owls: Athenian public finance and the regulation of coin production,’ in F. de Callatay (Ed.), Quantifying Monetary Supplies in Greco-Roman Times, Bari: Edipuglia, 127–149. von Reden, S., (2010), Money in Classical Antiquity, Cambridge: Cambridge University Press.

7

The Role of Money in the Economy

7.1 The Adoption of Currency in the Greek World as a Means of Conducting the Exchange of Goods and Services Currency innovation is related to the evolution of societies, as trade in goods went beyond the city-state limits and began to internationalize. Money, as a medium of exchange in antiquity, had both intrinsic and nominal value. Intrinsic value means that the value of a currency also corresponded to the value of the metal that the currency contained.1 According to Samuelson and Nordhaus (2010, 459), money in antiquity was commodity money. Aristotle (Pol., 1257a35) stated that commodity money is considered to be a means of exchange because of its general acceptance by individuals. However, Cohen (2008), Kroll (2011), Van Alfen (2011) and Leese (2017) argue that this is not completely true regarding Classical Greece. In modern times and after the gradual abandonment of the gold standard rule, transactions involve the so-called fiat money for which the value of the currency does not correspond to the intrinsic value of the metal from which it is made. Thus, fiat money has value only because a government maintains its value, or because parties engaging in exchange accept its value. Aristotle (Pol., 1.1257a) distinguished the very simple but essential (and pivotal) principle that the process of exchanging goods arises from the surplus of production between different individuals who seek ways to exchange them for other goods to increase their prosperity. When the exchange takes place directly between individuals (good to good) then we have a barter, while if the exchange is mediated by money, then the economy is considered to be moneyed. Following Aristotle, Xenophon (Anabasis, 8.11.5) stipulated that people, to satisfy their need to acquire goods, created places for conducting commercial action (markets) and further adopted currency to facilitate these exchanges. The creation of markets was intended to reduce the time required to meet needs, what, in modern parlance, is called transactional cost reduction. To understand the meaning of monetary circulation in Ancient Greece, the etymology of the word nomisma (currency) itself should not be overlooked. The word comes from the verb nemo, meaning divide, allot or assign. Aristotle explicitly states (Nic. Eth., 5.1133a) that the nomisma is not a creation of nature but of the law (nomos), and for this reason, it is called as such. In these verses, he provides a persuasive definition of money as a means of performing transactions. He writes: DOI:  10.4324/9781003434146-7

196  The Role of Money in the Economy Hence all commodities exchanged must be able to be compared in some way. It is to meet this requirement that men have introduced money; money constitutes in a manner a middle term, for it is a measure of all things, and so of their superior or inferior value, that is to say, how many shoes are equivalent to a house or to a given quantity of food…. for without this reciprocal proportion, there can be no exchange and no association; and it cannot be secured unless the commodities in question be equal in a sense…It is therefore necessary that all commodities shall be measured by some one standard (emphasis by the author). Von Reden (2010, 35) argues that Aristotle meant that, by convention (nomos), citizens gave value to legal tokens (nomismata) to achieve justice in exchange. Ioannes Stobaeus (Greek Anthology, 44.22) recognized the relationship between the buyer, the seller of the product and the state which provides the means of exchange: money. He argued that even if the goods for sale changed hands, the seller remains the owner of the goods until the moment he receives money from the buyer. This “trinity” relationship between the buyer, the seller and the state as the institution that provides legitimacy to the commercial transaction, is emphasized by J.R. Commons (1924, 87), one of the most important representatives of the Old Institutional School of Economics. From the above, it is obvious that these ancient philosophers had an idea of​​ money as the necessary means of conducting efficient commercial transactions and understood that conducting trade through money reduces what, in modern economics, is considered as transactional cost. Aristotle’s views on money influenced John Locke in seventeenth century AD, Adam Smith and the French Physiocrats’ movement of the eighteenth century and many other philosophers. The extensive use of coins in the Greek world during the Classical and Hellenistic periods proved crucial to the development of trade and the protection of private property. This is because the use of money in the form of coins i) became the accepted means for the exchange of goods and services; ii) was linked to transactional cost reduction on trade and any other economic kind of transaction, e.g., taxation payments to the state, state expenditures to citizens; and iii) was easier to handle and to store. The first recorded coins were minted in Lydia and some other Greek cities in Asia Minor sometime during the mid-seventh century BCE. They were made of electrum, an alloy of gold and silver, and had no markings indicating their origin and their place of manufacture.2 Then, in the same region, the first coins engraved on both sides were minted. Thompson et al. (1973), Kroll (2011) and Gabrielsen (2013, 346–347) argue that the first coins minted in Greece proper were the Aegenitan around 700 BCE, followed by the those of Milos around 650, of Corinth around 600 and, a little later, of Euboea and Athens. The fact that the first recorded coins in mainland Greece were minted on the island of Aegina should not be surprising. The Aeginitan economy had significantly evolved since the Archaic period by introducing currency due to an extroverted maritime commercial mentality (Figueira 1981). The Aeginitans, islanders and seafarers, apparently were

The Role of Money in the Economy  197 among the first to realize the value of using metal coins as a means of exchange in accelerating their trade. These first coins were only useful for high-value transactions. Initially, the use of coins was not widespread but focused on payments to the state, such as taxes and port duties (Kleiner 1975). Gradually, coins began to be minted by city-states in smaller value increments to facilitate trade more efficiently. The principal mints were those of Aegina, Corinth and Athens (which first produced the so-called Wappenmünzen after 525 BCE). The rest of the Greek world soon followed, from Cyprus through southern Italy and Sicily to Emporion in Spain, to Macedon and Thrace (Gabrielsen 2013, 347). Some 85 Greek city-states struck coins in the Archaic period, circa 550–475 BCE. Generally, according to Schaps (2008, 42–43, 47–48), from the sixth century BCE and on, the known Greek world had established a very broad monetary form of economic organization through the exchange of metal (mainly silver) coins. And after its invention by the Lydians (Herod., 1.94.1), coinage spread rapidly throughout the Greek world during the sixth century. Characteristically, Aristotle (Politics 1257a.20) called those who still barter for their transactions of goods “barbarian tribes.” This highly derogatory characterization (barbaric) denotes that monetization had advanced throughout the majority of the known Greek world and that only “barbaric” tribes were still performing their transactions through barter. This information provided by Aristotle deconstructs the claims of those who still dogmatically argue that the ancient Greek economy of the Classical times, due to its (supposed) primitive and rudimentary structures of production and organization, was not highly monetized. In Athens, from the last quarter of the sixth century BCE, various versions of earlier Wappenmünzen type coins were replaced, and the first silver Athenian drachmae began to be minted. The very etymology of the word certifies the nature of the drachma as the word comes from the verbs dratto, which means “grab,” and drattomai, which means “take in hand, receive,” while also metaphorically meaning, “I benefit or exploit.” And, indeed, it was with the drachma as a means of exchange that the Athenians benefited by conducting their transactions much more efficiently than in the previous era. The Athenian drachma was also called glauce (owl), which was the symbol of the city. Glauce was the sacred bird of the goddess Athena, a symbol of wisdom, prudence and farsightedness. Perhaps the Athenians chose to use this symbolism in their coins because they understood that the issues that were related to money issuance required wisdom and prudence! The Athenian drachma coins depicted the goddess Athena on the obverse, wearing a helmet, and on the back, the Athena as a glauce holding her gift, the olive branch. On the reverse, there was also the inscription “ΑΘΕ” (ATHE), an abbreviation indicating the Athenian origin of the coin. This currency and its denominations were to become the first “international currency” of the ancient world. Between 460 and 404 BCE, the Athenian state produced a very large number of coins, mostly tetradrachms (Van Alfen 2011, 1). The large volume of tetradrachms found so far compared to other denominations suggests that the tetradrachm was the most widely used denomination during the Classical and the Hellenistic periods. From the fourth century BCE on, the use of lower denominations of the glauce increased

198  The Role of Money in the Economy (Kleiner 1975). Under a modern perspective, such a description could provide indications for higher money velocity and higher gross domestic product (GDP) growth in the economy. Image 7.1 depicts such a coin, issued sometime after 449 BCE. On its face, it depicts a helmeted head of Athena, decorated with three olive leaves over her visor and a spiral palmette on the bowl. On the reverse side, it depicts the Athenian logo ΑΘΙ, an owl with its head facing the holder, an olive sprig and a tiny crescent. From the archaeological findings to date, it appears that the highest value denomination was the Athenian decadrachm, equal to ten drachmae. Image 7.2 depicts a decadrachm. This particular specimen was issued between 475–465 BCE. On the obverse, it depicts a head of Athena, facing toward the right, wearing a pendant earring and a crested Attic helmet ornamented with three olive leaves above the visor and spiral palmette on the bowl. On the reverse, it shows an owl facing the viewer, its wings spread. An olive sprig is depicted on the upper

Image 7.1  An Athenian tetradrachm. Source: http://www​.wildwinds​.com​/coins​/greece​/attica​/athens​/sg2526​.jpg With the permission of Wildwinds​.co​m.

Image 7.2  An Athenian decadrachm. Source: http://www​.wildwinds​.com​/coins​/greece​/attica​/athens​/sg2516​.jpg With the permission of Wildwinds​.co​m.

The Role of Money in the Economy  199

Image 7.3  An Athenian drachma. Source: http://www​.wildwinds​.com​/coins​/greece​/attica​/athens​/sg2527​.jpg With the permission of Wildwinds​.co​m.

left side. The logo ΑΘΕ denotes the Athenian origin of the coin. Image 7.3 depicts a drachma. This specimen was issued between 393–300 BCE. On the obverse, it depicts the helmeted head of Athena and on the reverse, an owl. There were also didrachms (two drachmae). Due to the complexity of the types of transactions in the market, the Athenian state required speed and divisibility to carry out high-value, and even more so, high-volume, low-value transactions. The coins that experienced the highest velocity were the smaller denominations. Currency divisibility played just that role. Both Classical Athens and modern societies’ cases prove that currency divisibility is a key component of economic activity. For example, in the European Union (EU), the euro is divided into 100 cents with some variations. The same is true, to provide further examples, for the currencies of the United States (USA) and Switzerland. Within this framework, there were also smaller denominations of the drachma, the obols, also of silver. Obols followed the same engraving technique as the drachmae; the obverse depicted a helmeted head of Athena, while on the reverse, an owl standing upright, with an olive sprig above its head. One drachma was equal to six obols. There were also tetrobols (4 obols, two-thirds of a drachma), triobols (three obols, half a drachma) and diobols (two obols, one-third of a drachma). Image 7.4 depicts a hemidrachm (three obols). This particular coin was issued sometime after 449 BCE. On the obverse, it depicts the helmeted head of Athena. On the reverse, it depicts an owl standing, with two olive sprigs. Image 7.5 depicts a diobol. This particular coin was issued circa 330–300 BCE. The obverse depicts the helmeted head of Athena, and the reverse depicts a double-bodied owl standing upright. Image 7.6 depicts an obol. This particular coin was issued sometime after 449 BCE. Even smaller currency units of the obol are attested. Those were bronze coins of very small size and weight, sharing the same logic as, for example, the cent as the unit of the US dollar and the EU’s euro, the pence as that of the British pound, etc. One obol was equal to four tetartemoria. Other such tokens were the tritartemorion

200  The Role of Money in the Economy

Image 7.4  An Athenian hemidrachm (three obols). Source: http://www​.wildwinds​.com​/coins​/greece​/attica​/athens​/SNGCop​_047​.jpg With the permission of Wildwinds​.co​m.

Image 7.5  An Athenian diobol. Source: http://www​.wildwinds​.com​/coins​/greece​/attica​/athens​/SNGCop​_073​.jpg With the permission of Wildwinds​.co​m.

(three tetartemoria, or three-quarters of an obol), the hemiobol (half an obol, equal to two tetartemoria), the trihemitetartemorion (one and a half tetartemoria), the tetartemorion (one-quarter of an obol) and the hemitetartemorion (half a tetartemorion, or one-eighth of an obol). These bronze coins, known also as chalkoi and kollyboi, were issued by the private sector (Kroll 1993; Camp and Kroll 2001). But whether they had general acceptance is controversial (Figueira 1998). This means that the private sector covered a need not addressed by the state’s silver mint. Figueira (1998, 504–506) argues that private issuers of bronze tokens did not follow any specific standard. This can be verified by looking at the coins presented in the Images 7.7–7.9. Image 7.7 shows a tritartemorion. This series was issued sometime after 449 BCE. On the obverse, it depicts a helmeted head of Athena and a circle of three

The Role of Money in the Economy  201

Image 7.6  An Athenian obol. Source: http://www​.wildwinds​.com​/coins​/greece​/attica​/athens​/SNGCop​_053​.2​.jpg With the permission of Wildwinds​.co​m.

Image 7.7  An Athenian tritartemorion. https://www​.wildwinds​.com​/coins​/greece​/attica​/ athens​/SNGCop​_057​.jpg With the permission of Wildwinds​.co​m.

crescents on the reverse. Image 7.8 depicts an hemiobol (two tetartemoria). This particular one was issued sometime after 449. On the obverse, it depicts the helmeted head of Athena. On the reverse, it shows an owl. Image 7.9 depicts a tetartemorion. This particular coin was issued sometime between 393–294. On the obverse, it depicts a helmeted head of Athena, while on the reverse, it depicts the Athenian logo ΑΘΕ above a crescent, all within incuse square. On the other hand, Camp and Kroll (2001) have identified a structure in the agora as a state mint, used for bronze coinage, known as nomismatocopeion (not the state silver mint of Image 5.2 known as argyrocopeion). It started minting coins possibly in the early fourth century BCE. The existence of the nomismatocopeion means that it is quite possible that the Athenian state also produced some quantity of bronze currency. According to von Reden (2010, 30, 32), the principal regions of copper

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Image 7.8  An Athenian hemiobol. Source: http://www​.wildwinds​.com​/coins​/greece​/attica​/athens​/SNGCop​_059​.jpg With the permission of Wildwinds​.co​m.

Image 7.9  An Athenian tetartemorion. Source: http://www​.wildwinds​.com​/coins​/greece​/attica​/athens​/SNGCop​_078​.jpg With the permission of Wildwinds​.co​m.

production were Chalkis and Cyprus (both of which derived their names from the Greek word for copper), Asia Minor, Etruria, Brutium and Elba island in Italy, as well as Spain. Perhaps the Athenian state imported copper from these places. Thus, in this case, one can notice a kind of specialization of each sector: silver coins were issued by the state, while bronze coins were issued mainly by the private sector. This, again, is one of the earliest examples of the issuing and circulation of private coins, common in electronic form in the twenty-first century (Bitcoin, Ethereum and the more than 10,000 other digital currencies in existence today). One reason that the state chose to issue either only small or no bronze lowvalue coins may have been that seigniorage,3 as the production of bronze coins by the state mint was too low, thus, not worthwhile.

The Role of Money in the Economy  203 Table 7.1 Athenian drachma and obol denominations Denomination

Value

Weight (in grams)

Decadrachm Tetradrachm Didrachm Drachma Tetrobol Triobol (hemidrachm) Diobol Obol Tritartemorion Hemiobol Trihemitartemorion Tetartemorion Hemitartemorion

10 drachmae 4 drachmae 2 drachmae 6 obols 4 obols 3 obols 2 obols 4 tetartemoria 3 tetartemoria 2 tetartemoria 1.5 tetartemoria One-quarter obol Half a tetartemorion

43 17.2 8.6 4.3 2.85 2.15 1.43 0.72 0.54 0.36 0.27 0.18 0.09

Sources: Kleiner (1975), Camp and Kroll (2001, 144–145) and Kroll (2011).

Table 7.1 summarizes the above evidence regarding the Athenian drachma and obol denominations. The subdivisions of the Athenian currency suggest that they arose to meet the needs of the increasing complexity of a developing economy with the volume of commercial transactions growing significantly between the fifth and fourth centuries BCE. An economy with rudimentary institutions would probably not consider as significant such a level of monetary circulation. It is also worth noting that Table 7.1 shows that the weight of the coins is proportionally related to the value of the coins. Kroll (1993), Figueira (1998, 200), Schaps (2004) and Van Alfen (2011, 2022), among others, have studied the monetary systems in Ancient Greece in detail. These studies confirm that, from the end of the fifth century BCE onward, Athens was one of the most monetarily developed state in the wider Aegean area, paying for government expenditures with large and smaller subdivisions of its national currency. They also confirm the wide range of subdivisions of the Athenian currency, arguing that something similar was observed in other states of the Greek world as well. According to Van Alfen (2011, 127), between 460 and 404 BCE, Athens produced a colossal number of coins, mainly tetradrachms. 7.2 The Mining Procedures in Classical Athens and the Athenian Mint Athens extracted silver from the mines at Laurion, in the southern part of Attica 30 kilometers from the city-state of Athens. Plentiful ore of high-quality silver content were found. Attica’s soil possessed substantial reserves of silver deposits (Xen., W.M., 4.11). In his theatrical play The Persians (293–294), Aeschylus characterizes (via the Chorus responding to the Persian queen Atossa) the large quantities of silver in Attica as “a fountain of silver, a treasure house beneath the earth.” Mining existed long before the Classical period, but it became intensive and very productive during the fifth and forth centuries BCE (Kleiner 1975; Figueira

204  The Role of Money in the Economy 1998; Camp and Kroll 2001; Christesen 2003; Schaps 2004; Kroll 2011; van Alfen 2011). Bresson (2019, 136) argues that the new mines that were used during the Classical period went far below the veins exploited hitherto, with shafts commonly 20–50 meters deep, or more. Athens coined silver coins, while other city-states coined silver, electrum and a few gold coins, such as Macedonia. Other states with a significant commercial orientation in the Greek world during the fifth century BCE that minted their own currencies, such as Aegina and Corinth, were not endowed with indigenous silver or gold veins and were obliged to import the metals from abroad or, possibly, from some of the islands of the Aegean Sea such as Kithnos, Seriphos, Siphnos and Cyprus, where some quantities of silver had been found. With the discovery of a new vein coinciding with Themistocles’s Naval Decree, the mines continued to make a significant contribution to the economy up until 413 BCE. Production then stopped because of the presence of the Spartan garrison at Dekeleia during the disastrous Peloponnesian War. It resumed after the war, intensifying after 367 BCE, with the new series of coins cut becoming much sought after because of the purity of their silver content. Modern archaeological evidence has revealed that the argyrocopeion was located near the (Christian period) church of Agioi Apostoloi in the agora of Athens. Image 7.10 (left and down, where the arrow points) depicts part of the installations of the Athenian argyrocopeion.4 It was built probably sometime between 430 and 420 BCE. Only its foundations have been preserved, showing a building that measures 27 × 29 m, with its northern half open to the sky. Any claim that the argyrocopeion was close to Laurion should be rejected (Camp and Kroll 2001, 144–145; Kroll 2011, 239; Van Alfen 2011, 8).

Image 7.10  Part of the Athenian silver mint installations. Source: https://www​.worldhistory​.org​/image​/8974​/church​-of​-the​-holy​-apostles​-athens/.

The Role of Money in the Economy  205 Val Alfen (2011, 9) adds that, as a currency production facility in the most literal sense, the mint required skilled laborers, presumably public slaves. The number of workers maintained by the mint is impossible to calculate, but it must have been sizeable, as the mint was producing millions of coins every year, something which is verified by authors such as Figueira (1998) and Bresson (2019). It is estimated that, in their heyday, the mines employed 25,000–30,000 slaves a year as a workforce (Acton 2014, 117). Laurion’s resources (ores) were owned by the city-state itself (Kallet 2007, 75). But mining operations were privately run enterprises: individuals or consortia of individuals bid for leases to exploit particular tracts of the mines. The procedure of auctioning off and leasing these tracts was undertaken on behalf of the state by the board of poletai. The winners in these auctions were vetted by the Athenian Council to ensure their ability to fulfill their obligations toward their contract with the Athenian state (Rhodes 1972, 97; Van Alfen 2011, 16).5 Kyriazis (2009, 117) notes that auctions, in principle, are mechanisms that help determine the correct price of a resource and an optimal allocation, as through this mechanism the resource to be exploited goes to the highest bidder. In this way, auctions maximize state revenue for the subject resource. Lyttkens (1994) has pointed out that this system in Athens had two advantages. First, it guaranteed a specific amount of state revenues, and second, it minimized transaction costs. Because the actual revenues were not known in advance, this investment entailed a high degree of risk for the entrepreneur, and this was why consortiums were established as a risk-sharing mechanism. In the fifth and fourth centuries, fixed-term mining leases were sold by the poletai in the presence of the 50 councilmen who served in a prytany and had to be present in all phases of this kind of auctioning process regarding the silver mines– that is, from the publication of the call for bids, to appraising the submitted bids and announcing the eventual winners (Acton 2014, 118). Their participation secured the integrity of the competition, discouraging possible attempts at favoritism (Papazarkadas 2011). The bidders were audited by the Athenian Council to ensure transparency and that they met the requirements in technical ability and knowledge to complete the project (van Αlfen 2011). In principle, the leases were granted by the poletai to experts on the field (Osborne 1985, 111–126). Ellithorpe (2019, 66) writes that the implementation of state auctions helped to establish correct pricing of land leases by simulating a market procedure while, at the same time, maximizing state revenue from the given source. Therefore, the basic aim of the state through mining was to raise revenues from the lease of public property to experts-individuals. In essence, poletai was subleasing public infrastructure for use by the private sector, a form of public–private partnership (3P) cooperation. With these revenues, the state could cover a part of its annual public expenditures, e.g., public works, transfer payments to invalid war veterans (Schaps 2004) and, in general, implement annual monetary policy.6 Aristotle (Ath. Const., 47.2) and Aperghis (1998, 6–8, 13) add that any new land to be exploited was leased for 1–3 years. If silver was found, the mine was classified as ergasimon (a workable mine) and was leased for 3 years. After this period,

206  The Role of Money in the Economy the mine was considered as anasaximon – that is, a mine that could be reauctioned for further exploitation with a 10-year lease period and, perhaps, with a renewal option for another 10 years. If the mine were abandoned or left for more than a year and then brought back into operation, it was reclassified as palaion anasaximon (a mine that once was anasaximon), with a 10-year lease period. For example: Timokleides, son of Hypsichides, from the deme of Phrearrhioi registered an palaion anasaximon mine, having a stele, named Poseidoniakon in Analphystos, north of which lies the mine called Astemisiakon, in the south the mine called Heroikon, in the east the property of Neoptolemos, in the west there is a gorge; Timokleides’ purchase, son of Hypsichides, from the deme of Phrearrhioi; the price is 20 drachmae. (P26:285) To distinguish each mine more easily from its neighbor, they were given names, deriving from gods, deities or heroes, as referred to the above inscription which reveals the names of three mines – Poseidoniakon, Astemisiakon and Heroikon – the first belonging to Timokleides and the others being adjacent to it. Austin and Vidal-Naquet (1977, 313, ftn. 5) retrieved 38 different inscriptions referring to 300 leases strung out over 60 years or more, between 367/366 and about 300 BCE, but in all probability, the total number of leases in these 60 years was much higher. Some individuals invested sums equal to 2,000 to 9,000 drachmae in the mines (Demosthenes, Against Nausimachus and Xenopeithes, 22; Demosthenes, Against Boeotus II., 52; Migeotte 2009, 107). The final volume of daily production; any technical issues, such as the use of new molds for the production of new types of coins; and the supervision of the works were determined by a group of public magistrates known as the ten epistatai tou argyrocopeiou (administrators-supervisors of the silver mint) plus their secretary. They were under the very strict control and auditing of the Athenian state through the Assembly of citizens and the Council and served for fixed terms (Van Alfen 2011, 8–9; Pritchard 2014, 12; Bitros et al. 2020). This means that the epistatai were responsible for achieving the volume of production set by the Assembly. Their duty was also to guarantee that the currency produced in the mint was of high quality and pure, worthy of bearing the insignia of the polis. The Athenians considered it of the utmost importance to supervise the currency production of their polis with the epistatai special board, as they understood that this was directly related to the prosperity/welfare of their society as a whole. Two kilos of silver bullion were extracted from each metric ton of ore. Gross profit from silver mining in the fourth century BCE has been estimated at 70 drachmae per ton of ore. Expenses (for enriched ore) were about 38 drachmae per ton, leaving a net profit of 32 drachmae. At least 12% and, perhaps, as much as 20% of the Athenian wealthy elite were engaged in mining activities (Christesen 2003). The Athenian wealthy elite was comprised of between 300–1,200 people. However, because silver-mining activities were costly, I believe that perhaps more than 20% of the wealthy elite were engaged in such activities. In any case, mining operations required the participation of a considerable number of people. ​

The Role of Money in the Economy  207

Image 7.11  A part of an ore-washing unit in Thorikos at Laurion . Source: https://commons​.wikimedia​.org​/wiki​/File​:Laurion​_Washing​_Site​_in​_Thorikos​.jpg.

Various fixed and recurring fees appear to have been associated with these leases, (Van Alfen 2011, 16–17). The state took a proportion of this silver bullion produced by the leases as taxes on revenue. Van Alfen (p. 16, ftn. 47) provides evidence that there is no consensus among scholars regarding the exact percentage. Aperghis (1998, 18–19) argues for a rate of 10% of the produced silver bullion, while Figueira (1998, 184–185) supports that the figure of 75–100T was a likely minimum for state income from all taxes that drew (even indirectly) from mine output, based on an estimated annual production from the mines of more than 700T, i.e., 10%–15%. Samons (2000) admits that a large percentage of the silver bullion remained in the hands of the state in the form of taxes. Van Alfen (2011, 19) adds that if the state wanted, it was in a favorable position to purchase the remaining 90% or a part of it. It is logical to believe that the state had this privilege, to purchase bullion in case of need, e.g., cutting a new series of coins and financing any extraordinary expenditure that exceeded the annual state budget, such as war campaign. ​ On the other hand, if, for whatever reason, the state decided not to exercise such a privilege, the consortia or the individual entrepreneurs to whom it belonged had four options. First, to keep this bullion in the form of silver ingots as their property (van Alfen 2011, 18). Second, to sell it to the state at a discount of about 10% and receive coins in exchange. This 10% covered an estimated cost of minting of about 2%, the remaining 8% being seigniorage. For those individuals who held

208  The Role of Money in the Economy

Image 7.12  A part of the interior of a mine in Thorikos at Laurion. Source: https://upload​.wikimedia​.org​/wikipedia​/commons​/c​/c2​/Mineing​_Shaft​_in​_Throikos​.jpg.

smaller amounts of bullion, the seigniorage cost was lower, only 5% (Figueira 1998, 242–244, 359–362; Migeotte 2009, 59; Kroll 2011, 236). Thus, the total discount, in this case, was smaller, 7%, obviously because the Athenian state wanted to help these small-quantity silver holders to make a satisfactory profit from the sale of their silver, in comparison to the large-quantity silver bullion holders who could make profit more easily by selling at wholesale and at a discount of about 10%. Furthermore, in extraordinary circumstances, such as a war, the mint could reduce the seigniorage further to attract more bullion to convert it into currency to meet the city-state’s needs. Thus, the mint undertook a function that looks similar to modern central bank practices in terms of influencing liquidity of money through the readjustment of the seigniorage. Third, as will be further analyzed in Section 7.3, another option was to immediately convert this huge amount of bullion into currency in the Athenian mint so that the holders then pay for their expensive liturgies. There is no doubt that in this way, the private sector significantly indirectly affected the overall amount of money circulated in the economy. Fourthly, according to Figueira (1998, 184–185), based on Xenophon (W.M., 3.2), this bullion held by private individuals could be sold at the open market(s) to the highest bidder, whether this meant by agents intented for foreign mints, or others. And van Alfen (2011, 18) adds that demand for bullion may have fluctuated

The Role of Money in the Economy  209 depending on factors such as the sailing season for trade or the buildup to war, allowing for broad (annual) variability in prices and for speculation. Van Alfen (ibid., p. 19) further argues that the producers would still have the option of selling their silver in another polis. Under such a perspective, it would perhaps not be an exaggeration to argue that this specific Athenian practice should be considered as a primitive version of an arbitrage technique.7 Exploiting the mines was a complex task. Although it could become quite profitable, it also involved substantial business risk. This is described by Plutarch (Nicias 4). The minting procedure included considerable overhead costs in addition to taxes and rents: private contractors or consortia had to provide the entire technical infrastructure for mining, such as the purchase (or lease) and upkeep of slaves, digging tools, mine supports, lamps and other materials and slaves. However, the investment's return, according to Christesen (2003, 52), was very high, possibly rising to 50%. Van Alfen (2011, 17–18) adds that investors could minimize their risks by choosing to participate in primitive versions of joint-stock companies (JSCs) because the costs of extraction could then be spread amongst a group of investors. If an investor or group of investors discovered a rich vein of ore, profits could be remarkably high. To share risks, entrepreneurs rented small plots of land for mining in various places; they did not focus only on a particular area. One can read Osborne (1985, Chapter 6) and Christesen (2003) for a further analysis of these relative strategies of minimizing risk. Private contractors used experienced and specialized workers in the mines, mostly slaves, either hired or owned. Achieving intensive production required very hard work and a large number of slaves, who provided the greatest workforce contribution to the mines’ production (Van Alfen 2011, 16–17). Slave owners who rented their slaves to businessmen were paid one obol daily and two additional obols for their food and clothing. It is not clear whether the private contractor(s) who undertook specific exploitation of land through lease could also lease stateowned slaves. It is more than certain that the working conditions of the slaves in the mines were very unhealthy, laborious and dangerous. Xenophon (Mem., 3.6.12) testifies to this. On the other hand, it should also be acknowledged that mining operations required large quantities of food, wine and olive oil to support the working force, as well as wood, charcoal and tools. This large workforce supported farmsteads in the broader region of the mining district, whose operations were market-oriented and created an important volume of trade via the agorai of the surrounding demes (Fachard and Bresson 2022, 113). Rhodes (1972, 97) and Van Alfen (2011, 16–18) estimated that the total silver production could exceed 700T annually and reach 1,000T per year, that is, 6 million drachmae, a very large amount of money that practically corresponded to millions of coins per year. Bresson (2019), although recognizing that these numbers are highly accepted in the bibliography, estimated that during the mid-fifth century BCE, the Laurion mines increased their productivity to such an extent that they could extract silver bullion that could be even as high as approximately 1,500T of silver coins per year, an undeniably huge sum of money. It has been already

210  The Role of Money in the Economy referred that a talent was equal to 25.8 kilograms of silver. Thus the production of 1,500 talents could mean that the Athenians could have achieved a production of approximately 38,7 tonnes of pure silver at that year. This amount could then be cut into coins. He has further estimated that between 540 to 450 BCE a total of 16,197T of coins were produced by the Athenian silver mint – in other words, 97,182,000 drachmae, an undeniably enormous amount of money. Archaeological research confirms that the huge production of Athenian coins had spread to a wide range of markets in the Eastern Mediterranean. An indirect indication of this is the information provided by Van Wees (2013, 101–102), who argues that scientific analysis of lead isotope ratios has revealed that not only some of the earliest Athenian coins but also ingots and scraps in hoards found as far afield as seventh century Israel and sixth century Sicily were originating from silver from Laurion. This extraction activity was vital and lucrative for the prosperity of the Athenian polis. Therefore, according to Osborne (1985, 111), the mining industry was excluded from the institution of antidosis, which was related to the possibility of exchanging property between two parties. Generally, according to Xenophon (W.M., 4.12), even foreigners could bid for acquiring the rights to exploit particular tracts under the same tax regime as the Athenians (isoteleia). This is very important information, as it demonstrates three further issues: first, that the basic rationale of the internationalized Athenian economy was non-discriminatory but provided equal opportunities and profit prospects for all, Athenians, metics and foreigners alike. Second, that foreign investors could produce bullion which then could be converted into currency (under a small seigniorage cost) and be circulated within the Athenian economy. Third, theoretically, foreign investors could produce bullion and then export it to be circulated abroad, as Figueira (1998, 184–185) argues. 7.3 Money Decentralization under Direct Democracy Procedures in Decision-making According to Figueira (1998), van Alfen (2011, 2022), O’ Halloran (2018, 312), Bitros et al. (2020) and Economou et al. (2021a, b), an important finding regarding Athenian monetary policy practices is that the duty to decide the size of the money to be produced by the silver mint was entrusted by the polis to the Athenian citizens themselves, through their Assembly decisions. Such a mentality (money supply decisions to be taken by the demos) applied also for many other poleis. For example, Van Alfen (2022, 301) provides evidence (OGIS 339), from secondcentury Sestos (an ancient city in Thrace) that the demos of Sestos (through the Assembly) made the collective decision to strike a new bronze coinage for the sake of both prestige and profit. The whole procedure was overseen by a magistrate named Menas. Van Alfen (2011, 9), based on Aristophanes (Ecclesiazusae, 815–822), argues that money supply decisions, such as setting the basic parameters of the operation, including the range of the denominations produced, the purity of the metal and the types of coins, as well as any fees and accounting procedures, rested ultimately with

The Role of Money in the Economy  211 the Council and the Assembly. Of course, “financial experts” such as Nicophon, for example (see Section 7.5), provided proposals and counterproposals to establish the proper amount of currency the state required (Bitros et. al. 2020; Economou et al. 2021a). Thus, before making any decisions crucial to the prosperity of their society, Athenian citizens were heeding the advice of financial experts on various economic policy measures (Kallet-Marx 1993; Samons 2000; Ober 2015). These covered a wide range of issues such as money supply by the argyrocopeion, taxfarming or the grain trade. The ambition of each of these “experts” was to convince the Assembly, through a democratic process, that his proposal was beneficial for the prosperity of the polis. Debates between orators and financial experts took place, thus, allowing the Assembly to assess any proposal, objection or counterproposal and decide on how best to ensure the society’s welfare. The above Athenian financial practice raises a general issue for modern democracies, in which independent regulatory bodies (as in, for example, the sectors of telecommunications, energy, etc.) seem to proliferate, as opposed to the ancient Athenian practice in which decisions regarding monetary and state policy issues, in general, were taken through democratic procedures. Thus, although the mining activities and the mint were supervised by the Council, the final decision for any new volume of currency to be produced was made by the Assembly of citizens (van Alfen 2011, 10; 2022). In this sense, monetary policy was considered as a public good, the definition of which was of vital concern to the state and was not subject to an independent monetary authority, as is very common today. Consequently, its restructuring could never be subjected to some technocrats, as required by the current model of governance, in which monetary circulation is determined by central banks, non-elected “experts” and “non-political” bodies, institutionally independent of state supervision.8 Taking the above into account, an important issue arises: how was the money supply in Athens regulated? Money supply was determined by i) the state (through the Assembly), ii) the market forces themselves, iii) the competitiveness of the economy and iv) and the annual trade balance. Regarding i), the Athenian budget had to cover various annual public expenditures such as the armed forces; construction of ships; payment for crew for the navy, public buildings, the theorika and the ecclesiastikon; and payments to the councilmen, the Heliaia judges and other public magistrates.9 All these payments were made in silver currency, so the supply of currency had to be sufficient to cover them. A related issue is whether the annual supply of currency produced by the state mint covered all public expenditures (Van Alfen 2011, 12). This was the ideal scenario, as, according to Aristotle (Oec., 2.1.15), in principle, the Athenian state called for keeping the annual budget balanced by holding public expenditures at least in line with public revenues. In the case of increased budgetary needs, the Athenian mint, by order of the citizens’ Assembly, could increase the money supply in the economy through i) the production of coins from those silver ingots owned by the Athenian state and ii) through any further quantity of silver ingots that the Athenian state had purchased from the private sector and kept in order to convert into coins.

212  The Role of Money in the Economy If fiscal discipline were not possible, due to exigent circumstances such as war, the state could further borrow money from the treasuries – temples of Athena and the other gods (TTAGs), as was analyzed in Section 6.4. It could also increase the taxation of those persons who were exploiting the mines. Then, some of these people could decide to pay the additional taxes through bullion, and this could then be converted by the mint into state currency. These monetary policies increased the money supply and the overall amount of money that was circulated in the economy. Van Alfen (2011, 19) adds that although the incentive for the private sector to participate and undertake the investment in mining was high, the basic idea of the whole mining process was still the production of coinage in favor of the state. A second determinant of money supply was market forces themselves and the private sector (Bitros et al. 2020; Economou et al. 2021a, b). Money supply could be increased by the melting and monetization of silver bullion held by private entities, such as those who were involved in mining at Laurion. In Section 7.3, it was described that, as van Alfen (2011, 16) writes, a large proportion of the silver produced at the Laurion mines appears to have ended up in private hands. On this O’ Halloran (2018, 132, ftn. 92) writes: With no central bank or equivalent mechanism, and monetary supply effectively dictated by silver production, Athens could not be said to have had a monetary policy – its money supply was effectively controlled by private mining entrepreneurs (emphasis by the author). Such a deduction could be related, to some extent, to the current and expanding trend related to alternative forms of money issued by the private sector – that is cryptocurrencies or digital currencies – whose expansion is challenging the standard form of fiat money issued by governments. Due to space limitations, I cannot provide an analysis to this point, but readers can read Ammous (2018) and Bitros (2022). A second way of influencing money supply by the private sector was by issuing small-value bronze coins by private persons as described in Section 7.2. A third way should be attributed to banks. In Sections 7.1 and 7.2, the variety of financial services provided by banks to individuals, traders and investors was analyzed. Because Athenian commercial banks did extend credit, one can assume that they increased the overall money supply in the economy. Cohen (2008) analyzes this in detail. But there are no cliometric data available to calculate the size of such a money multiplier and, in general, the effect on the economy from money supply from the banking sector. A fourth way was what in today’s terminology is called foreign direct investments (FDI) by foreigners and metics. Some of them, like the father of the orator Lysias or the Syracusan Kephalos, were among the richest residents of Athens (Lysias, Ag. Er., 12.19). At least a decent number of them would not only bring with them their skills but also some capital (either money or infrastructure) from their original poleis. This could be seen as an indirect form of an FDI and is an interesting area for future research. A fifth way was the TTAGs as described in Section 6.4. These quasi-state institutions (QSIs), by lending (mainly) to the state and, in exceptional cases, also

The Role of Money in the Economy  213 Table 7.2 The function of money in the Athenian economy Aspects of the Athenian Monetary Policy Type of money Intrinsic value currency: mainly silver (but also bronze and, in some extraordinary instances such as the Peloponnesian War, silver-plated or gold) State monetary The quantity of money produced by the state’s silver mint had to cover the annual state expenses. It was decided and approved in advance policy by the Assembly of citizens. This was a direct democratic procedure related to the will of the people. The assembly of citizens. Means of • Private citizens could convert silver bullion to coins and then use affecting them to perform a series of commercial/financial transactions such as money paying their financial obligations to the state. supply • Private citizens or consortia of citizens could further issue low-value bronze currency. • Banks. • Metics and foreigners creating a kind of FDI. • The TTAGs

individuals, were actually injecting money in the economy, thus, increasing the overall money supply. Table 7.2 summarizes all the evidence regarding the function of money in the Athenian economy. 7.4 Nicophon’s Law Monetary networks of cooperation for maritime trade in the Aegean gradually developed from the Archaic to the Classical period (Osborne 1996). They further developed during the Hellenistic period (Rostovtzeff 1936, [1941], 1953; Constantakopoulou 2007; Mack 2015). Athenian tetradrachm coins were of excellent craftsmanship, made with meticulously careful work. They were of high-value silver content, stable in their silver value for about two centuries and, thus, became the main currency of the Eastern Mediterranean world throughout the Classical period (Jarde ([1926], 1996, 255; Kroll 2011). Before the start of the Peloponnesian War, Athens had managed to make the Attic drachma the leading international trading currency among their allies, for every kind of commercial activity. Xenophon (W.M., 3.1–2) informs us that: At most other ports merchants are compelled to ship a return cargo, because the local currency has no circulation in other states; but at Athens they have the opportunity of exchanging their cargo and exporting very many classes of goods that are in demand. Xenophon also writes that foreign merchants could make profit by selling various goods or even silver bullion in Athens. Other remarkable coins of the fifth century BCE that were similarly used widely as means of exchange came from

214  The Role of Money in the Economy Rhodes, Pergamon and the Achaean League (Migeotte 2009, 124–125). On the other hand, a currency that was not widely used would not be accepted as a medium of exchange in some states or be accepted only in terms of its intrinsic value. There were also a few states that did not accept transactions even with international currencies (Gabrielsen 2013, 347). The most important reason for the high demand for the Athenian currency in the international markets of the time should be attributed to its purity and reliability (Bitros et al. 2020; Economou et al. 2021a, b; Halkos et al. 2021). Kroll (2011, 236), who has dealt extensively with monetary circulation in Greek antiquity, argues that after a resolution in the popular Assembly in the fifth century, the Athenian currency showed a revaluation at 3% or 5% over the intrinsic value of silver. Another relative case is provided by Van Alfen (2011, 13, ftn 36) who refers to a play by Diphilus (6.225c, PCG fr. 7) in which a fishmonger takes heavier Aeginetan obols as payment for a sea bass and gives lighter Athenian obols as change. Leese (2017, 49) reproduces Diphilus who says that the fishmongers were fraudulent in their very nature and would seek to profit from buyers however they could, even going so far as to exploit differences in foreign currency values to make profits when a fair price had been agreed upon, accepting only higher value Aeginetan currency and only returning lower value Athenian. Aeginetan coinage of the same denomination was worth more than Athenian, containing about 66% more silver by weight (ibid., pp., 50). This is of course a kind of arbitrage under a modern interpretation. This observation is important because i) it refutes the argument that the value of ancient coins was based solely on the value of metal (commodity money) and ii) there was some kind of exchange rate fluctuation of the Athenian currency relative to the other currencies circulating within the markets of east Mediterranean. Cohen (2008) provides further evidence on this. This issue is related to the general discussion in the international literature in which there is an ongoing debate about the metallist vs chartalist view of money. The two terms were introduced by G.F. Knapp ([1905], 1924). In short, metallism is the economic principle that the value of money derives from the purchasing power of the commodity upon which it is based. Chartalism holds that even in systems where coins are made of precious metals, money derives its value mainly from the authority of the state. Thus, money also represents a claim or credit against the issuing institutions, a state, a bank and so on. So far, various views have been expressed regarding the issue of chartalism or metallism during Greek antiquity, such as those of Grierson (1977). Cohen (2008) and Semenova and Wray (2015) provide a rather chartalist interpretation. It is not our intention to reproduce all the existing literature on the topic. The fact that the value of the currencies was, in principle, based on the quantity and quality of silver, gold, bronze, or electrum is a strong indication that, here, we are dealing with a case of metallism. On the other hand, the fact that, due to its high demand in the international market of the times, the Athenian currency showed a revaluation of 3% or 5% above its real value is an element of a chartalist nature. What is described here seems similar to the findings of Katsari (2011), who observed that elements

The Role of Money in the Economy  215 from both metallism and chartalism were reflected in the monetary system introduced later by Augustus and used throughout the eastern provinces of the Roman Empire from the early first century to the late third century AD. Due to the universal character of the Athenian currency, there was a strong incentive to counterfeit it. In the early fourth century BCE, counterfeit foreignmade pieces circulated side by side in Athens with genuine silver owls of greater intrinsic value, creating a grave problem for merchants and purchasers alike (Kleiner 1975; Figueira 1998, 529; Ober 2008, 229). At best, counterfeit coins produced in foreign mints had the right weight and the right silver content as the Athenian glauce (Kleiner 1975; Van Alfen 2011, 13). However, in the worst cases, counterfeiting involved metal content of lower value in their core, such as bronze. This was a very serious problem that threatened to severely undermine commercial activity and the reliability and trust in transactions on the Athenian and the foreign markets. In general, currency counterfeiting is an intertemporal problem. In modern times, counterfeiting can cause significant financial losses and opportunity costs to many companies around the globe. This is why modern governments pose severe penalties to those who try to speculate by trying to inject counterfeit money into the economy. The negative side-effects of such illegal acts can be observed, for example, with the case of the so-called superdollar (also known as a superbill or supernote), a very high-quality counterfeit 100 US dollar bill, made by unknown organizations or governments. In 2011, the US authorities admitted that these counterfeit bills were in “worldwide circulation” from the late 1980s until at least July 2000. The superdollar could undermine the trustworthiness of the American dollar in global markets. To address this very serious problem, the Athenians took two decisive measures. First, Demosthenes (Ag. Tim., 24.210–214) argues that whoever tried to pass counterfeit coins in the market was put to death by law, which was the most severe penalty in the Athenian state. This further signifies how important it was to the Athenians that their national currency must not be counterfeited. Such a penalty denotes that the Athenians understood that ensuring the trustworthiness of their currency was directly linked to the long-term prosperity of their economy and society, and whoever was trying to undermine this deserved the highest penalty of all: death. Second, the Athenians voted in favor of the so-called Nicophon’s Law, proposed in 375/374 BCE. Before analyzing this law further, it is important to mention that, from hoards found in the Athenian agora, we know that foreign coins were also occasionally exchanged, apparently legally, in the Athenian economy in parallel to the Athenian drachmae, such as those from the islands of Chios and Aegina and from Megara, Cyzicus and Chalkis, a member of the Boeotian League (Kleiner 1975, 14; Buttrey 1979; Mørkholm 1982; Kroll 1993, 166–167; Bitros et al. 2020, 70–71). Shipton (1997, 408) writes that the Athenian monetary circulation system was an “open system,” and the eminent historian of money in Greek antiquity, T. Figueira (1998, 57), writes that while it is undoubtedly true that Attic coins mediated the vast majority of transactions occurring on Athenian territory, coins from

216  The Role of Money in the Economy Chios may have been legally usable in Attica and that Athenians, like so many other Greeks, occasionally used coins from Aegina. Another eminent expert of the history of money in Greek antiquity, P. Van Alfen (2011, 13) adds that even small denominations of foreign coins could be circulated in the Athenian economy. He writes: Because Athens was a major international entrepot, other currencies flowed into the polis in the course of normal trade, but how well these other currencies were quarantined is open to question. While it might be expected that large denomination Kyzikene electrum (and Persian gold) coins would obtain (official?) currency in Athens (cf. Lysias XII.11), in part because of their tremendous value, lack of comparable Athenian denominations, and specialized use in Black Sea trade, comic references suggest that foreign small silver change also circulated in the Athenian agora (emphasis by the author). And this was not a policy implemented only in the commercial center of the Athenian Alliance – Athens and its entrepôt Piraeus – but, according to Figueira (1998, 266–294), it is quite possible that the Athenian Alliance member states had the right to pay their tributes to the Allied Fund (AF) in non-Attic coins as well. In economic terms, this means that such a policy would fully enhance the existence of a regime which, in practice, permitted the use of parallel currencies within the Athenian Alliance, the first maritime league of history, with the Athenian currency being the dominant. Having this in mind, Nicophon’s Law required, among other things, that all foreign-made imitations of the Athenian drachmae entering the Athenian economy for the purpose of conducting commercial transactions, were allowed to circulate freely in the economy providing that:

• These coins were of the exactly the same silver content as a genuine Athenian drachma.

• They bore the same stamp as a genuine Athenian drachma. In other words,

if the coins, upon examination, were assessed to be genuine imitations of the Athenian drachma, they were returned to the foreign traders who could use them freely in the Athenian economy for any kind of transaction.

In any other case, e.g., coins found with less silver content or having a bronze or lead core were confiscated immediately and their metal was offered to the Treasury Temple of the Mother of Gods. A plethora of authors who have studied this issue accepts such an interpretation, including Stroud (1974), Kleiner (1975), Shipton (1997, 408), Figueira (1998), Kosmetatou (2002), Rhodes and Osborne (2003, 115), Schaps (2004, 181), Engen (2005), Ober (2008), Psoma (2011), Lykke (2017, 219), Ellithorpe (2019) and Bitros et al. (2020). True counterfeit coins were issued either by individual forgers or by foreign states as part of a policy of deliberate debasement (Stroud 1974, 172). And this was something that could reduce the consumers’ confidence in the currency (Ellithorpe 2019). According to Ober (2008, 233), the rationale behind this protective law is

The Role of Money in the Economy  217 similar to the famous law established during the Elizabethan era in England by Sir Thomas Gresham (1519–1579), who argued that if bad or counterfeit coins (those with a lower precious metal content) were exchanged at parity, they displaced the authentic (gold or silver) because the public hoarded the latter as savings, leaving only the former in circulation. The result was the genuine coins disappeared from circulation to be converted into precious metals. It seems that Athenians were conscious of the long-term benefits of trust and reputation of their currency against the short-term benefits of debasement. And because the Athenian drachma became a universal currency, Athenian citizens showed remarkable restraint against the temptation to adulterate its silver content, when even a minor debasement would have reaped appreciable benefits given the size of the coinage in circulation. A characteristic proof of this is Aristophanes (Frogs, 718–724) who strongly criticized the phenomenon of currency debasement. He wrote that: Many times, it seems to us the city has done the same thing with the best and the brightest of its citizens as with the old coinage and the new gold currency. For these, not counterfeit at all, but the finest it seems of all coins, and the only ones of the proper stamp, of resounding metal amongst Greeks and foreigners every-where, we never use, but the inferior bronze ones instead, minted just yesterday or the day before with the basest stamp. To implement Nicophon’s Law, two public slaves were introduced, known as dokimastai (testers); one had a bench in the agora of Athens and the other at the harbor of Piraeus. Their task was to examine foreign currencies to see whether they were fraudulent. Their tasks were related to great responsibilities and had direct effects on the lives of citizens (Martin 1991). An earlier version of the institution of the dokimastai has been dated back to 398/397 BCE (Stroud 1974, 166–167, 176–177; Buttrey 1981, 80). As was the case with all the posts of magistrates in Athens, the two dokimastai were fully accountable both during and after their tenure. They were under strict supervision by a body known as the syllogeis (collectors), generally under the jurisdiction of the Athenian Council. As a rule, the dokimastai were highly experienced slaves. However, if the Athenian Council could not find a suitable slave to perform such a crucial duty, it had to hire a citizen, possibly a banker or an argyramoibos (Stroud 1974, 183; Martin 1991). According to Nicophon’s Law, if the dokimastai did not act per the law when checking coins, the syllogeis were obliged to sentence them to 50 lashes (Stroud 1974, 158–159). This severe punishment was a strong motive for the dokimastai to perform their duties effectively. The activities of the dokimastai have been confirmed by archaeological evidence. Confiscated counterfeit coins, destroyed in the manner described in Nicophon’s Law have been discovered in the sanctuaries of Demeter at Eleusis and of Poseidon at Isthmia in Corinth; they are also mentioned in treasury records from Delos (Kosmetatou 2002, 191). This indirectly implies that in the city-state of Corinth and the island of Delos had laws similar to that of Nicophon.

218  The Role of Money in the Economy Nicophon’s Law worked in the following way: suppose we have two merchants, an Athenian who wishes to sell his products to a Syracusan, but he has no trust in the currency he is going to receive by the Syracusan. If one of the parties had doubts regarding the purity of the foreign coins, they could bring them to one of the dokimastai to examine them. If found impure, the coins were confiscated. If found to be authentic copies of the Athenian drachma (having also the proper silver content), they were returned to their owners, who then had the right to use them legally to conduct commercial transactions on the Athenian market.10 If the Athenian merchant still had doubts, the merchant from Syracuse could denounce him and his products were confiscated (Figueira 1998, 538; Rhodes and Osborne 2003, 34). This came as a punishment because, as an Athenian or metic, he did not trust the state's institutions that carried out the relevant audit. This rule also shows that the philosophy of the Athenian state was shaped in such a way that it required confidence in the economic institutions of the polis from all the citizens and metics; in a way, this forced the citizens and metics to “believe” in these institutions, with the ultimate goal of ensuring social peace and trust between local and foreign traders, a prerequisite to ensure long-term economic prosperity among Athenian citizens. Thus, an Athenian merchant could demand from a foreign merchant that they both apply to the dokimastai only if he were not sure of the authenticity of the coins that the foreign merchant brought to carry out the transaction. On the other hand, if, after applying to dokimastai, a foreign merchant still had doubts regarding the currency he was about to receive from an Athenian merchant, he could be denounced by the Athenian, and his merchandise was also confiscated. However, if the Athenian merchant had confidence in the foreign currency, he didn't have to apply to the dokimastai (Buttrey 1979). In other words, Nicophon’s Law did not demand the mandatory inspection of all the foreign traders' currencies. The law served as a mechanism for securing confidence and trust between trade parties and, according to Ober (2008, 222–225, 237), as a mechanism to reduce transaction costs. In this sense, there was always the possibility (however weak) that counterfeit foreign currencies did circulate in the Athenian economy. In such a case, both merchants could be mutually harmed. In Halkos et al. (2021) and Economou et al. (2021b), a game-theoretical analysis was developed for this issue by considering different hypothetical scenarios of merchants applying to the dokimastai or not while trading with each other. This interpretation, which mirrors that of Figueira (1998), is important because it proves that foreign coins could circulate in the Athenian agora if the two dokimastai were bypassed. Figueira (1998, 545) writes: I emphasize that this legislation did not forbid a seller to take such coins in payment, but merely that he was not required to receive them as he would be required in the case of genuine Athenian coins, approved by the dokimastai. Another issue is whether the two dokimastai received any commission in favor of the state or for themselves when two parties, say the buyer and a seller of a product,

The Role of Money in the Economy  219 applied for their services. Historians who have focused on these issues, including Stroud (1974), Martin (1991), Figueira (1998), Ober (2008), Harris (2013) and Bresson (2016), have not clarified this. In all probability, there was no commission. Nicophon’s Law indirectly also implies property relations between the money holder and the seller of the good(s). The exchange agreement presupposed the exchange of property, money in place of goods and vice versa. But the crucial point here is the protection and supervision provided by the state against counterfeit currencies that undermined the legality of the transaction. The Athenian state, by ensuring the reliability of transactions, essentially guaranteed the protection of individual property between traders. Mechanisms to combat coin forgery were applied not only in city-states but also more broadly in democratic federal states, such as the Achaean League. Federal coins were issued by city-states’ local mints (Mackil 2013; Economou et al. 2015; Economou and Kyriazis 2015, 2018; Economou 2020). As a final comment, economic decrees such as those of Nicophon could be further reinforced if accompanied by decrees or laws of similar nature. In fact, this had been discerned by Aristophanes (Birds) who describes the “Cloud-cuckoolanders” (or “dwellers in Cloudcuckooland”) who are imaginary peoples and the Olophyxians,11 and in Verse 1040, writes that: The Nephelococcygians12 shall adopt the same weights, measures and decrees as the Olophyxians. This is a clear admonition for the adoption of common weights, standards and decrees, and, obviously, Aristophanes proposes measures that were considered as widely accepted means of international collaboration during his time. Common weights and measurement standards became even more widespread during the Hellenistic period. 7.5. Coin-testing Techniques In practical terms, the dokimastai used a series of techniques to determine whether or not a coin was counterfeit. The relative evidence cited below is based on the significant findings of Stroud (1974), Buttrey (1979, 1981), Martin (1991), De Callataÿ (1996), Figueira (1998), Tylecote (2002), Christesen (2003), Ober (2008) and Economou and Kyriazis (2021).

• Checking by sight: simply examining a coin visually was the initial form of

inspection and an important source of information critical to an experienced dokimastes. For example, an experienced dokimastes could easily spot a coin with a slightly different figure of goddess Athena, not made from a die at the Athenian mint. • Palpation: the dokimastai had a lot of experience, and simply feeling a coin in their fingers had become second nature. By palpating a coin, they could have a good sense regarding its purity. Palpation was less reliable for plated coins, but with debased coinage, even a 15% copper content resulted in a different texture on the coin.

220  The Role of Money in the Economy

• Sound diagnosis: another method was to throw the coin onto a hard surface such •

•

• • •

•

as a bench. The dokimastai were familiar with the specific sounds indicating whether a coin was pure in content or counterfeit. Checking by smell: for experienced currency users such as the dokimastai, the smell was another determinant of a currency’s purity. Bronze and silver each have a distinct smell; when a coin is first warmed by rubbing it with the fingers, a trained dokimastes could smell if there was bronze inside a counterfeit coin. Using special scales: special precision scales, sealed and certified by the city’s official authorities, could be used by the dokimastai to determine whether the weight of a coin corresponded to the correct weight of a pure silver coin. These special scales were located in the metroon. Cupellation: the dokimastai could also perform cupellation techniques (see further below) when they were not on duty at their tables. Test cuts: a method by which a dokimastes carefully inspected coins by making tiny cuts on the edge with a small chisel to see if there was a plated core. Many surviving Athenian drachmae bear such cuts (see Image 7.13). Die differences: another means for an experienced dokimastes to distinguish a pure Athenian drachma from a counterfeit was the size differences between the dies from which the coins were made. Athenian dies were smaller to dies introduced by other city-states and made a deeper impression in the flan, and Athenian flans were often more oblong. Also, Athenian dies often had finer details (Stroud 1974, 164; Buttrey 1981, 78). De Callataÿ (1996) discusses the importance of the special die axis and how Athens in the Classical period struck its reverses in an attempt to thwart counterfeits. Countermarked coins: a countermarked coin had some additional mark(s) or symbol(s) punched into it at some point while in circulation after it was originally produced. Countermarking involved placing a tiny imprint on a coin with a small punch to verify its purity and/or validate it for acceptance.

Image 7.13  Athenian tetradrachm with multiple test cuts. Source: https://www​.wildwinds​.com​/coins​/greece​/attica​/athens​/Kroll​_08​.jpg With the permission of Wildwinds​.co​m.

The Role of Money in the Economy  221

• Touchstones. according to a variety of authors such as Stroud (1974, ftn. 54),

the dokimastai employed touchstone techniques to reveal if a silver coin was pure or counterfeit.

Some of the above evidence need further clarification. Regarding the issue of cupellation, this is a refining process in metallurgy in which ores or alloyed metals are treated under very high temperatures. Through special techniques, noble metals, such as gold and silver, are separated from base metals, such as lead, copper, zinc, arsenic, antimony, or bismuth, that might be present in the ore. The process is based on the principle that, unlike those metals, precious metals do not oxidize or react chemically; when they are heated at high temperatures, they remain apart while the others react, forming slags or other compounds (Craddock 1995). A method similar to cupellation is described by Rihll (2001, 127–128), and the technique is known as spirting. According to Christesen (2003) and Ober (2008, 237), although it cannot be verified, it is possible that the dokimastai performed cupellation tests while not on duty at their tables. Ober argues that once a few examples from a series had been tested “in the lab,” so to speak, the dokimastai would be able to deal efficiently with all coins from that series through visual inspection in their daily practice “at the table.” Ober’s claim is verified by Tylecote (2002), an expert on ancient metallurgy, who argues that the processing and melting of various types of metal, such as iron, was already known to the Greeks, at least from 900 BCE. More specifically, Tylecote (pp. 57–61) provides evidence i) regarding how coins from silver or other material were made and ii) that cupellation regarding silver ores from the Laurion mines was a common practice. Those mines were worked from very early times, even during the Mycenaean era; thus, even before 1100 BCE (Tylecote 2002, 71). During the period described (508–323 BCE), melting and cupellation practices became more advanced due to knowledge aggregated over the centuries. As a final comment, cupellation techniques made the dokimastai more experienced, capable of recognizing and separating authentic coins from the counterfeit. Regarding countermarked coins, starting in the late sixth and early fifth centuries BCE, countermarks were probably made by moneychangers and bankers. Certainly, by the fifth century, this practice was introduced by the Athenian authorities as a way to denote that a particular coin was genuine (Buttrey 1979, 37; Figueira 1998, 125). The fact that numerous test cuts and countermarked Athenian coinages have been found as archaeological evidence denotes the fear that many merchants and individuals had of receiving counterfeit coins (Image 7.13). Regarding touchstones, this is a small tablet of dark stone, such as slate or lyddite, used for assaying precious metal alloys. It has a grained surface on which soft metals leave a visible trace. This rock has a very strange capacity. When a piece of gold or silver is rubbed on it, a trace of a specific color is engraved on its body. For example, if an alloy containing gold is rubbed on the stone, the trace has a different color. The more gold or silver the alloy contains, the more intense is the color of the trench.

222  The Role of Money in the Economy Another dimension of the above discussion also relates to the institutions of the argyramoiboi and the trapezitai (the bankers). Both groups were responsible for a large percentage of money transactions within the economy. And of course, when the Athenian argyramoiboi and trapezitai were performing transactions, they had the necessary experience to evaluate efficiently the purity of the coins that they were about to accept. Touchstone techniques were also used by argyramoiboi. Essentially, the argyramoiboi and the trapezitai provided the Athenian state with an indirect service: the evaluation of the reliability of a large volume of currencies circulating in the economy. Lykke (2017, 218) informs us that another indirect way of providing coin-testing services was further provided by the staff of the treasuries – temples, which played a role in the withdrawal of counterfeit coins from circulation. Evidence for this not only comes from Athens but also from other temples, too, such as the Temple of Poseidon in Isthmia, where counterfeited Aeginetan and Corinthian coins have been found (Stroud 1974, 174–175). Another means of precaution most likely would be citizens themselves; they would try to be careful with the coins they received from transactions in the same way that citizens/consumers in modern societies try to avoid counterfeit money. As a final comment, the groups that played a catalytic role in the smooth functioning of the Athenian currency are summarized as follows:

• • • • •

Dokimastai (state institution). Argyramoiboi (private sector). Trapezitai (private sector). The treasuries – temples through their (auditing) staff (QSIs – an institution). The demos (citizens, metics, slaves, foreign merchants).

7.6 The Coinage Decree and the Athenian Attempts to Create an Ad Hoc Monetary Union in the Eastern Mediterranean As has already been analyzed in the previous sections, the purity of the Athenian drachma’s silver content was a key reason for its high international demand, precisely because it provided security to “international” traders, minimizing the risk of fraud in trade. The institution of the dokimastai was established under the same reasoning not only in Athens but also among its allies. Schaps (2022, 240) writes that to achieve efficient international trade for profit making, the Greeks accepted the Athenian owls which served as intermediaries between export and import cargos throughout the Eastern Mediterranean. A second reason for why the Athenian drachma became the leading international currency in the Mediterranean during the Classical period is that currency competition, both within and outside the Alliance, favored currencies issued by larger economies. It lowered information and transaction costs in general, as these coins were more recognizable, with users having a clear perception as to their silver content and, thus, to their value. Because of currency competition, electrum coins were gradually replaced by pure silver coins because the latter could be more

The Role of Money in the Economy  223 easily evaluated than the bimetallic content of the former. This made it easier to confirm their value, thus, lowering transaction costs. In addition, the die (stamp) of a state mint was a guarantee of value, and this justified a degree of seigniorage.13 A third reason is related to the so-called Coinage Decree which made the Athenian drachma and Athenian weights and measures mandatory in all allied states. This decree has been discovered in a number of stone inscriptions (Aphytis, Hamaxitos, Kos, Odessa, Siphnos, Smyrna, Syme) and has since led to an ongoing controversy. Some historians have interpreted it as prohibiting the use and circulation of other currencies within the Alliance. Historians date the decree variously from 449 to 414 BCE. For a review of this literature, one can read Figueira (1998, 431–465) and Ellithorpe (2019). Older interpretations saw it as an imperialistic measure by Athens, transforming the Alliance into an Athenian empire and attempting to impose its currency on its allies as the unique legal tender (Mattingly 1961). Finley (1973) argues that the Coinage Decree aimed at neutralizing the autonomy of Athens’ allies and promoting Athenian supremacy. Athenian and allied officials were threatened with prosecution if they abused the stipulations of the Decree (Figueira 1998, 345, 410, 422, 457). However, the acceptance of Athenian currency by the alliance’s member-states was also related to another financial reason: a single currency facilitated the circulation of the financial contributions of each city-state to the alliance and, thus, their collection in the AF on Delos, and later in Athens, could be easier. Figueira (1998, 310–411) adds that the Coinage Decree introduced common weights and standards and made the Attic drachma the leading international currency but, in practice, it did not prohibit the minting of coins by other states and the parallel circulation of these coins within the Alliance. Even after the implementation of the decree, there were at least 11 and possibly as many as 24 mints still operating in allied city-states, which proves that the decree, in practice, did not forbid the minting of coins by non-Athenian mints (Figueira 1998, 39–48, 62–91, 176; 2003, 74). The Coinage Decree failed to enforce the acceptance of Athenian monetary and metrological standards by all Alliance members. Non-Athenian currency was not demonetized, nor was it recalled to Athens and replaced. Thus, even if, in principle, this decree was an attempt by the Athenians to impose their currency and monetary standards on their allies, in practice, it was not very successful. In two recent papers, Ellithorpe (2019) and Bitros (2021) provide an economic diastasis on the failure of the Athenians to impose the Coinage Decree on their allies. Ellithorpe (2019, 61) does not deny the “imperialistic” nature of this decree but gives emphasis to the fact that the decree largely represented a selfish monetary policy of one regional power, and selfish monetary policy is not always equal to imperialism. Bitros (2021) points out that by keeping the mint open to cutting fine quality Attic coins on demand and at a relatively low cost and seigniorage charge, the Athenians achieved economies of scale in coin-fabrication. I believe this is an interesting assumption, as it is related to one of the key criteria that characterize an optimal currency area (OCA) regarding modern economies, according to

224  The Role of Money in the Economy Mundell’s (1961) definition. Other criteria, as defined by Mundell, among others are i) labor mobility throughout the area and ii) capital mobility and price and wage flexibility. These were also met among the Athenian Alliance members. Bitros (2021) provides the interesting view that the economic dynamics in the minting markets were so profoundly in favor of the Athenian mint, those in the other allied states would have closed down anyway, an outcome that would have come about naturally through market forces. Supportive evidence to this comes from Migeotte (2009, 59–60) who argues that smaller cities could entrust the cut of their coins to the mints of larger cities. I guess that this could have happened due to lack of technical know-how or because it was too costly to develop a coin production infrastructure to produce only small quantities to meet just the local needs in small city-states. Under such a logic, Migeotte adds that because private workshops working on gold and silver destined for a variety of uses (precious tableware, jewelry, etc.) also existed, known as argyrocopeia or chrysochoieia, it is possible that some city-states may have entrusted the minting of their respective currencies to these private workshops to be executed according to their official directives and under official supervision. Considering all the above, I agree with Figueira (1998, 2003), Elliothorpe (2019) and Bitros (2021). After all, if the Athenian grand strategy were to impose an ad hoc monetary-currency union based only on the circulation of the Athenian currency among the members of the Athenian Alliance, Athenians could have resorted to their formidable military power and forcibly closed, one by one, the mints of all the city-states throughout the Alliance. As far as the historical record shows, such an attempt was never made. In reality, what happened was that Athens and its allies had established a primitive version of an ad hoc monetary union in which currencies were convertible against each other; however, this union was primarily based on the Athenian currency which became the most highly desirable coinage throughout the Levant, in Egypt and in Arabia, based not just on its availability but also on its reputation for quality (Economou et al. 2021a; Van Alfen 2022, 307). After all, Ober’s (2008, 48–52, 285–286) study of 146,099 coins found in 852 coin hoards dating between 550 and 300 BCE shows that throughout the Classical period, Athenian coins appeared in more hoards, in greater numbers over time, in more geographic regions and more frequently than the coins of any other polis. Consequently, even in the absence of cliometric data, it might not be an exaggeration to argue that a large portion of the coins that were circulating throughout the Mediterranean, the Balkans and Asia Minor were actually minted in the Athenian mint from the silver of Laurion. In principle, common standards facilitate trade and, in general, economic prosperity throughout an entire region. This also happened with other historical cases of monetary unions in which common standards were a main feature, as in the Greek Achaean, Aetolian and Boeotian federal leagues as well as, in more recent times, the German Zollverein, which led to the German Reichsmark and the current Eurozone in the EU. In a wider sense, the Coinage Decree introduced a system of parallel currencies with the Athenian one being the dominant among the rest.

The Role of Money in the Economy  225 Interstate trade in the Athenian ad hoc monetary union on both sides of the Aegean and the Eastern Mediterranean, with more than 300 allied city-states proved very effective. For example, Isocrates (Panegyricus, 4, 42) proudly proclaimed that there was no good produced anywhere in the world that could not be found in the port of Piraeus. O’ Halloran (2018, 130) adds that the widespread usage of owls by Athens and her allies created an enormous conglomeration of interdependent markets that led to a regional economic integration between them, with Athens being the paramount commercial metropolis. Figueira (1998, 52–58, 563–576, 2003, 75) adds that till 431, nearly 200 states, or more than two-thirds of the allied city-states of Athens in the Aegean Sea and elsewhere, had never minted precious metals. The existence of such a unified economic area is confirmed also by Jarde ([1926], 1996, 255): When a single city exercised hegemony over a whole group it was careful to obtain, by persuasion or force, the adoption of its own means. Thus the Attic system became that of the whole maritime confederacy. Money, in the same way, acquired an international value…Each city had its mint which struck coins bearing the emblem of the city. But, as in the case of weights and measures, there was a movement towards unification…Above all the importance assumed by the trade of certain cities and the good alloy of their currency caused certain coins to be accepted on every market. The money of Aegina, Corinth, Phocaea, Cyzicus and Lampsacos had international value. Figueira (1981, 1998) writes that, during the pentecontaetia period, some other states such as Corinth and Aegina (which traditionally were strong commercial antagonists to Athens) had also introduced very reliable and widely accepted currencies in the international markets. But, for sure, it was the Athenian drachma that was the dominant currency unit among all the existing ones till it was deposed in the Hellenistic period by another Greek coin that became universal, the Macedonian series of tetradrachms issued by Alexander the Great and his successors.14 Image 7.14 depicts an Aeginitan stater15 issued between 480–457 BCE (during the pentecontaetia). On the obverse side, the coin bears the famous turtle, the symbol of the city, and on the reverse, the symbol “T.” The earliest known stamped stater is an electrum turtle coin, struck at Aegina that dates to about 700 BCE.16 Image 7.15 presents a Corinthian stater (issued between 335–306 BCE). On the reverse, the coin bears the characteristic Pegasus, the symbol of the polis. But what cannot be disputed is that, as von Reden (2010) argues, the Coinage Decree encouraged the flow of trade throughout the Aegean and especially between Athens and its allied states. In accordance with Von Reden, Morris (2009, 136–139) rejects the conventional label of “empire” in describing Athenian power in the fifth century BCE, emphasizing on the institutions shared amongst the beneficiaries of Athenian power, which extended to a multitude of minor communities across the Aegean. Such institutions included shared taxation, shared coinage and a massive commercial activity at Piraeus. Related to this, Mackil and Van Alfen (2006) have further found that one additional monetary development of the Classical period was the appearance of

226  The Role of Money in the Economy

Image 7.14  An Aeginetan stater Source: http://www​.wildwinds​.com​/coins​/greece​/aigina​/Earle​-Fox​_IIIa​.jpg With the permission of Wildwinds​.co​m.

Image 7.15  A Corinthian stater. Source: http://www​.wildwinds​.com​/coins​/greece​/corinth​/BMC​_365​_corr​.jpg With the permission of Wildwinds​.co​m.

“cooperative coinages.” By this they mean the coordinated production of coins by more than one polis (such as poleis that were members of a federal state such as the Achaean League), on a shared weight standard and usually with at least one common type as a way to further extend their commercial cooperation with each other. Bresson (2014, 48–49, 54–55) further argues that:

• International trade was extremely active and played a vital role in the life of these city-states.

• It was also instrumental in the establishment of an international division of labor. • The Greek world experienced the first “world economy” based on long-distance trade.

• Thanks to transport by sea and a sophisticated trading network, not only highvalue items but also bulk consumption goods were traded at a long distance.

The Role of Money in the Economy  227

• Long-distance trade exchange in the ancient Greek world saw significant progress. • Everything could be traded, from basic food items such as grain, wine or oil, to more elaborate goods such as ceramics, furniture, weapons, clothes, perfumes and books as well as raw or half-processed materials such as iron, copper or lead ingots, wool, wood and marble.

Bresson (ibid, p. 55) concludes that the evidence for this long-distance trade, both of the Mediterranean shipwrecks in the period 700 BCE–700 AD and the archaeological findings on land or in written sources, is now overwhelming and its significance cannot be denied any longer. Thus, maritime trade throughout the Mediterranean was very developed during the Classical period. According to Rostovtzeff (1936, [1941], 1953), Migeotte (2009, 131–136), Mackil (2013), Economou et al. (2015), Mack (2015), Economou and Kyriazis (2016a), Manning (2018), Economou (2020), Halkos et al. (2021), Economou et al. (2021a, b), Fachard and Bresson (2022, 119) and others, this continued and further developed during the Hellenistic and the Roman periods, respectively, in which forms of interstate relations included, among others, isopoliteia and symbola agreements among the city-states involved, etc. In accordance with this, the Polybius’s Histories (2.37) conveys that trade networks backed up by relative institutions such as common weights and standards were actively practiced in federal states such as the Achaean League. Rostovtzeff (1936, 249–250) provides a very characteristic passage regarding the international orientation of Athens and the Greek world during the Classical and, even more so, Hellenistic times: In the united Hellenistic world, commerce became ecumenical in the full Ancient sense of this term. Even those parts of the Ancient world which politically and culturally stood outside it – China and India, parts of Germany, the Iranians of the Northeast – took part in it. Moreover, commerce was no longer enslaved to politics…It was a form of economic life which was based on economic freedom and individual economic activity (emphasis by the author) and which was directed toward the free accumulation of capital in the hands of individuals and groups of individuals. It was founded on rationally organized agriculture and industry, functioning not to satisfy the needs of the producers and of a local restricted market, but for an indefinite market, and tending toward mass production of specialized goods. There is no doubt that commercial activities between the Athenian traders and their trading partners in other areas/states were substantial, even if due to the absence of any kind of cliometric data, the volume of such transactions cannot be described in detail. But what is for sure is that the Athenians and their allies had successfully established an ad hoc monetary union in which some of the key laissez faire principles were applied in practice. I also believe that in the case of Classical Athens, another modern international trade theoretical axiom also applied: the more the geographical distance between Athens and its trading partners increased, the less volume of trade between Athens and

228  The Role of Money in the Economy this particular city-state. In modern terminology, this is related to the so-called gravity model of world trade (see Krugman 2023, Chapter 2). Just as the gravitational attraction between two objects is proportional to the product of their masses and diminishes with distance, the same goes for the trade between two countries; the volume of commerce and the value of trade between two states diminishes as long as the distance increases, mainly due to shipping costs that increase the price of the products. 7.7. The Issue of Inflation Perhaps the most characteristic period to discuss the issue of inflation in Classical Athens is the era that includes Pericles’s period and the Peloponnesian War, i.e., a period circa 463–403 BCE. It was probably the period in which Athens most likely achieved the highest revenue ceiling (including revenue from allied remittances), and with these revenues, a significant number of large-scale public works were financed. Figueira (1998, 72, 493–495) argues that in the fifth century, both the Athenian and the ancient Greek economy, in general, faced high levels of inflation. Loomis (1998, 243) argues that a rise in wages even as a high as 50% was observed between 450 to 432. This could have been the result of enormous tribute revenues pouring into Athens year after year upon the transfer of the treasury of the Athenian Alliance from Delos to Athens. During the Peloponnesian War, prices of products in the markets of Attica rose. Some indicative prices are extant. A medimnos of wheat cost 3 drachmae in 422, 5 to 6.5 between 414 and the beginning of the fourth century, then it fell to 3 drachmae in 393 and increased to 6 between 330–324. Shoes cost 8 drachmae in 388 and about 6 drachmae in 330. An auction of slaves in 414 gave prices of 60 to 360 drachmae (360 for a skilled artisan jeweler), while prices during the fourth century fluctuated between 50 to 150 for unskilled workers and 180 to 600 for skilled (metal workers, etc.). Remuneration followed price trends. For the greater part of the fourth century, the daily wage of rowers in the fleet was about 2–3 obols. A rower’s wage increased to 1 drachma during the Peloponnesian War, the same rate applying for hoplites and their attendants. One drachma was the wage paid to skilled stonemasons for the Erechtheion project on the Acropolis in 409 BCE, the same wage being paid to Athenian citizens, metics and slaves. By the end of 300 BCE, wages had risen to 1.5 drachmae for unskilled workers and 2–2.5 drachmae for skilled. However, we have to bear in mind that extant evidence does not give a clear trend for high inflationary pressures. Prices did fluctuate and wages did rise, but we cannot establish a purchasing power parity that would indicate either that wages or prices followed the same trend (e.g., real wages remained constant) or that there was a faster growth of wages than prices, or vice versa. Regarding cereals, the few comparative prices that are available show fluctuations but not a clear trend. For example, the 5–6.5 drachmae of 414–399 BCE is about the same as the 5–6 drachmae for 330–324 BCE. A medimnos of barley cost 2 drachmae in 422 BCE and the same in 329 (Loomis 1998, especially 32–62, 88–96, 104–106, 166–185). Between 430 and 330 BCE, the prices rose in general, but only modestly (ibid., 240–250). Even if wage inflation had risen at a rate of 1% or less per annum, it

The Role of Money in the Economy  229 would have taken approximately 70 years for wage rates to double (ibid., 247, 257). This means that there was a slight (and not excessive) rise in inflation for a long period, even though silver supply injections continued to rise in the economy throughout this period. Determining the fluctuations in the price level is not at all an easy task because of the lack of sufficient statistical data. However, in contrast to Finley and his followers, who reject large changes in the prices of goods and services precisely because they do not believe that the Athenian economy had characteristics of a free market economy, Bitros et al. (2020, 148–152) argued that the fact that no high inflation was observed in Athens of the Classical period should be attributed to changes in the relative prices goods and services.17 Supportive to this argument is a recent paper by Bitros (2022) who developed a theoretical-mathematical model in which he found that in an open, free market economy, with a privately accessible state mint and an official currency based on a metallic standard, given any shock, the prices remain stable both in the long and short run, with the exception of when the currency is debased. To reach such a result, he tested the following historical cases: Athens during the Classical period, France from 1350 to 1436 AD, Spain in the sixteenth century, the United States from 1870 to 1914 AD and China from 1910 to 1935. These findings are similar to those of Hamilton (1977) who studied the issue of inflation regarding various historical cases starting from the wars of Spanish rulers Charles V, Philip II and their Hapsburg successors. Furthermore, it must also be considered that a portion of the currency produced in the Laurion mines may not have circulated at all within the Athenian economy but, rather, in the economies of Athens’ allies, such as for financing military programs. For example, the maintenance of a trireme with the duty to patrol in the Aegean Sea could take place in the port of an allied city-state, e.g., Amphipolis or Samos, instead of taking place in Mounichia or Cantharos in Piraeus, and the maintenance cost paid there, in Athenian currency. Accordingly, the money for such an expense would not circulate in the city-state of Athens and Piraeus, but in the “international” markets. Athens, because of the international character of the Athenian currency, had the privilege of generating money in Athens and then channeling it throughout the Athenian Alliance in allied ports etc., just like the USA today, which operate nearly 800 military bases in more than 70 countries around the globe and can create positive spillover effects in the local economies. Notes 1 I elaborate briefly on this in Section 7.5. 2 Bresson (2019) offers an explanation of why electrum coins were first introduced in western Asia in the Archaic period and not elsewhere. 3 I remind the reader that seigniorage is the difference between the value of currency/money and the cost of producing it. It is, essentially, the profit earned by the government by printing currency. Seigniorage is analogous to the interest rate charged by the central bank either for banking loans to the private bank or the discount rate when buying obligations.

230  The Role of Money in the Economy 4 See also Image 5.3. 5 I further analyze the auction procedures in Section 8.2. 6 I will revert to this in Section 7.4. 7 I remind the reader that arbitrage implies the simultaneous purchase and sale of the same asset (in our case, silver bullion) in different markets in order to profit from tiny differences in the asset's listed price. It exploits short-lived variations in the price of identical or similar financial instruments in different markets. See further: https://www​ .investopedia​.com​/terms​/a​/arbitrage​.asp 8 It must, of course, be acknowledged that there are still central banks around the globe which are strongly dependent on the government. 9 For these magistrates, see Chapter 8. 10 See Kleiner (1975), Figueira (1998), Rhodes and Osborne (2003, 115), Schaps (2004, 181), Εngen (2005), Ober (2008, Chapter 6), Johnstone (2011, 11–13), Harris (2013, 29, 159–160), Psoma (2011) and Schefold (2011) for such an interpretation. There is a dispute among financial historians and numismatists regarding this point, but I am convinced by the majority of the above authors, that these genuine imitations were returned to their owners who then could use them legally for performing financial transactions in Athens. Buttrey (1979) is not convinced with such an interpretation, but, in all probability, he is wrong. 11 The Olophyxians were real people, inhabiting a small city in Thrace. 12 The “Cloud-cuckoo-landers.” 13 This mentality is at odds with the modern financial system which favors low-value banknote materials and relies on an authenticity tape to prove authenticity. 14 Gold coins were utilized in large numbers by the Kingdom of Macedon, most likely due to the large gold deposits on Mount Pangaio and the nearby island of Thasos. Consequently, cash transactions were one of the main tools of economic activity for the economies of the ancient Greek world. 15 A stater could be worth 2, 3, or 4 drachmae, based on the city-state in which it was issued. For example, the silver stater minted at Corinth, of 8.6 g weight, was divided into three silver drachmae of 2.9 g, but was often linked to the Athenian silver didrachm (two drachmae) weighting 8.6 g. The Aeginetan stater weighed 12.47g and the Lydian (Milesian) 14.3 g. 16 I have to clarify here that the “T” or tau is our term for the pattern of dots on the shell of some turtles; it was not to the intention of the Aeginitans to create that association. 17 A relative price is the price of a commodity such as a good or service in terms of another, i.e., the ratio of two prices. Due to space limitations, I cannot analyze here how relative prices function and how they affect (international) commerce, but readers can consult Krugman et al. (2023) among others on this.

Ancient Greek authors (Perseus Digital Library) Aristophanes, Birds Aristophanes, Ecclesiazusae Aristotle, Athenian Constitution Aristotle, Eudemian Ethics Aristotle, Nicomachean Ethics Aristotle, Politics Demosthenes, Against Boetus II Demosthenes, Against Nausimachus and Xenopeithes Demosthenes, Against Timocrates Ioannes Stobaeus, The Greek Anthology

The Role of Money in the Economy  231 Isocrates, Panegyricus Lysias, Against Eratosthenes Xenophon, Anabasis Xenophon, Memorabilia Xenophon, Ways and Means Modern authors Acton, P. H., (2014), Poiesis: Manufacturing in Classical Athens, Oxford: Oxford University Press. Ammous, S., (2018), The Bitcoin Standard: The Decentralized Alternative to Central Banking, Hoboken, NJ: Wiley. Aperghis, G. G., (1998), ‘A reassessment of the Laurion mining lease records,’ BCIS, 42, 1–20. Austin, M. M., Vidal-Naquet, P., (1977), Economic and Social History of Ancient Greece, London: Batsford Academic and Educational Ltd. Bitros, G. C., Economou, E. M. L., Kyriazis, N. C., (2020), Democracy and Money: Lessons for Today from Athens in Classical Times, London, New York: Routledge. Bitros, G. C., (2021), ‘From the Athenian silver to the bitcoin standard: Private money in a state-enforced free banking model,’ Department of Economics, Athens University of Economics and Business, WORKING PAPER no. 14-2021. https://papers​.ssrn​.com​/sol3​ /papers​.cfm​?abstract​_id​=3836037 Bitros, G. C., (2022), ‘Commodoty money in the price level,’ Quarterly Joural of Austrian Econimics, 25(1), 147–183. Bresson, A., (2014), ‘Capitalism and the ancient Greek economy,’ in L. Neal, J. G. Williamson (Eds.), The Rise of Capitalism: From Ancient Origins to 1848, Vol. 1, Cambridge: Cambridge University Press. Bresson, A., (2016), The Making of the Ancient Greek Economy: Institutions, Markets, and Growth in the City-States, Princeton, NJ: Princeton University Press. Bresson, A., (2019a), ‘The Athenian money supply in the Late Archaic and Early Classical Period,’ Journal of Ancient Civilizations, 34(2), 135–153. Bresson, A., (2019b), ‘The choice of electrum monometallism: When and why,’ White Gold, 477–496. Buttrey, T. V., (1979), ‘The Athenian currency law of 375/4 B.C.,’ in O. Mørkholm, N. Waggoner (Eds.), Greek Numismatics and Archaeology: Essays in Honor of Margaret Thompson, Wetteren: Belgium, 33–45. Buttrey, T. V., (1981), ‘More on the Athenian coinage law of 375/4 B.C.,’ NumAntCl, 10, 71–94. Camp, J., Kroll, J. H., (2001), ‘The Agora mint and Athenian bronze coinage,’ Hesperia, 70(2), 127–162. Christesen, P., (2003), ‘Economic rationalism in fourth-century BCE Athens,’ Greece & Rome, 50(1), 31–56. Cohen, E. E., (2008), ‘Elasticity of the money supply at Athens,’ in W. H. Harris (Ed.), The Monetary Systems of the Greeks and Romans, Oxford: Oxford University Press, 66–83. Commons, J. R., (1924), Legal Foundations of Capitalism, New York: Macmillan. Constantakopoulou, C., (2007), The Dance of the Islands. Insularity, Networks, the Athenian Empire and the Aegean World, Oxford: Oxford University Press.

232  The Role of Money in the Economy Craddock, P. T., (1995), Early Metal Mining and Production, Edinburgh: Edinburgh University Press. de Callataÿ, F., (1996), Les Monnaies Grecques et L.' Orientation des Axes, Milan: Glaux. Economou, E. M. L., (2020), The Achaean Federation in Ancient Greece: History, Political and Economic Organisation, Warfare and Strategy, Cham: Springer. Economou, E. M. L., Kyriazis, N. A., (2021), ‘Achieving sustainable financial transactions under regimes without a Central Bank-An intertemporal comparison,’ Sustainability, 13(3), 1071. Economou, E. Μ. L., Kyriazis, N. C., (2015), ‘Ancient Greek democratic federations: A comparative study with the European Union,’ in H. Peukert (Ed.), Taking up the Challenge! Festschrift fürJürgen Backhaus, Marburg: Metropolis-Verlag, 289–306. Economou E. Μ. L., Kyriazis, N. C., (2016), ‘The emergence and the development of the Achaean federation. Lessons and institutional proposals for modern societies,’ Evolutionary and Institutional Economics Review, 13, 93–112. Economou, E. M. L., Kyriazis, N. C., (2018), ‘Ancient Greek Achaeans, modern Germans and EU integration: An interdisciplinary analysis of federations,’ in M. J. Holler, G. Trιdimas (Eds.), German-Greek Yearbook of Political Economy, Vol. 1, München: Ηoller-Verlag, 137–160. Economou, E. Μ. L., Kyriazis, N. C., Kyriazis, N. A., (2021a), ‘Money decentralization under direct democracy procedures. The case of Classical Athens,’ Journal of Risk and Financial Management, 14(1), 30. https://doi​.org​/10​.3390​/jrfm14010030 Economou, E. Μ. L., Kyriazis, N. C., Kyriazis, N. A., (2021b), ‘Managing financial risk while performing international commercial transactions. Intertemporal lessons from Athens in Classical times,’ Journal of Risk and Financial Management, 14, 509. Economou, E. Μ. L., Kyriazis N. C., Metaxas, T., (2015), ‘The institutional and economic foundations of regional proto-federations,’ Economics of Governance, 16(3), 251–271. Ellithorpe, C. J., (2019), ‘Athenian mercantilism: A new approach to the Athenian Coinage Decree and the Law of Nicophon,’ Journal of Ancient History and Archaeology, 6(3), 59–75. Engen, D. T., (2005), ‘Ancient greenbacks, Athenian owls, the law of Nicophon, and the Greek economy,’ Historia, 54(4), 359–381. Fachard, S., Bresson, A., (2022), ‘Athens and the Aegean,’ in S. von Reden (Ed.), The Cambridge Companion to Ancient Greek Economy, Cambridge: Cambridge University Press, 106–124. Figueira, T. J., (1981), Aegina: Society and Politics, New York: Arno Press. Figueira, T. J., (1998), The Power of Money: Coinage and Politics in the Athenian Empire, Philadelphia: University of Pennsylvania Press. Figueira, T. J., (2003), ‘Economic integration and monetary consolidation in the Athenian arkhê,’ in G. Urso (Ed.), Moneta, Mercanti, Banchieri. I Precenteti Greci e Romani dell’ Euro, Pisa: Edizioni ETC, 71–92. Finley, M. I., (1973), The Ancient Economy, Berkeley: University of California Press. Gabrielsen, V., (2013), ‘Finance and taxes,’ in H. Beck (Ed.), A Companion to Ancient Greek Government, Malden, MA: Willey-Blackwell, 332–348. Grierson, P., (1977), The Origins of Money, London: The Athlone Press. Halkos, G., Kyriazis, N. C., Economou, E. M. L., (2021), ‘Plato as a game theorist towards an international trade policy,’ Journal of Risk and Financial Management, 14(115). https://doi​.org​/10​.3390​/jrfm14030115 Hamilton, E. J., (1977), ‘The role of war in modern inflation,’ Journal of Economic History, XXXVII(1), 13–19.

The Role of Money in the Economy  233 Harris, E. M., (2013), The Rule of Law in Action in Democratic, Athens, Oxford: Oxford University Press. Jarde, A., ([1926], 1996), The Formation of the Greek People, London, New York: Routledge. Johnstone, S., (2011), A History of Trust in Ancient Greece, Chicago, IL: The University of Chicago Press. Kallet-Marx, L., (1993), Money, Expense and Naval Power in Thucydides’ History 1-5.24, Berkeley: University of California Press. Kallet, L., (2007), ‘The Athenian economy,‘ in L. J. Samons II (Ed.), The Cambridge Companion to the Age of Pericles, Cambridge: Cambridge University Press, 70–95. Katsari, C., (2011), The Roman Monetary System. The Eastern Provinces from the First to the Third Century AD, Cambridge: Cambridge University Press. Kleiner, F. S., (1975), Greek and Roman Coins in the Roman Agora, Princeton, NJ: The American of Classical Studies at Athens. Knapp, F. G., ([1905], 1924), The State Theory of Money, London: Macmillan & Company Limited. Kosmetatou, E., (2002), ‘The Athenian inventory lists: A review article,’ L' Antiquité Classique, 71, 85–197. Kroll J., (1993), The Athenian Agora Results of Excavations, Volume XXVI, Princeton, NJ: The American School of Classical Studies in Athens. Kroll, J., (2011), ‘The reminting of Athenian silver coinage 353 B.C.,’ Hesperia, 80, 229–259. Krugman, P. R., Obstfeld, M., Melitz, M., (2023), International Economics: Theory and Policy, 12th ed., New York: Pearson. Kyriazis, N. C., (2009), ‘Financing the Athenian state: Public choice in the age of Demosthenes,’ European Journal of Law and Economics, 27(2), 109–127. Leese, M. S., (2017), ‘Kapêloi and economic rationality in fourth-century B.C.E. Athens,’ Illinois Classical Studies, 42(1), 41–59. Loomis, W. T., (1998), Wages, Welfare Costs and Inflation in Classical Athens, Michigan: Michigan University Press. Lykke, A., (2017), ‘Ritualizing the use of coins in Ancient Greek Sanctuaries,’ Journal of Ancient History, 5(2), 205–227. Lyttkens, C. H., (1994), ‘A predatory democracy: An essay on taxation in classical Athens,’ Explorations in Economic History, 31, 62–90. Mack, W., (2015), Proxeny and Polis: Institutional Networks in the Ancient Greek World, Oxford: Oxford University Press. Mackil, E., van Alfen, P. G., (2006), ‘Cooperative coinage,’ in John H. Kroll, P. G. Van Alfen (Eds.), Agoranomia: Studies in Money and Exchange Presented to John H. Kroll, New York: American Numismatic Society, 201–246. Mackil, E., (2013), Creating a Common Polity: Religion, Economy, and Politics in the Making of the Greek Koinon, Berkeley, Los Angeles: University of California Press. Manning, J. G., (2018), The Open Sea: The Economic Life of the Ancient Mediterranean World from the Iron Age to the Rise of Rome, Princeton: Princeton University Press. Martin, T. R., (1991), ‘Silver coins and public slaves in the Athenian law of 375/4 B.C.,’ in W. E. Metcalf (Ed.), Mnemata: Papers in Memory of Nancy M. Waggoner, New York: American Numismatic Society, 21–47. Mattingly, H. B., (1961), ‘The Athenian coinage decree,’ Historia: Zeitschrift für Alte Geschichte, 10(2), 148–188. Migeotte, L., (2009), The Economy of the Greek Cities. From the Archaic Period to the Early Roman Empire, Berkeley, Los Angeles, London: University of California Press.

234  The Role of Money in the Economy Mørkholm, O., (1982), ‘Some reflections on the production and use of coinage in Ancient Greece,’ Historia: Zeitschriftfür Alte Geschichte, 31(H3), 290–305. Morris, I., (2009), ‘The greater Athenian state,‘ in I. Morris, W. Scheidel (Eds.), The Dynamics of Ancient Empires, State Power from Assyria to Byzantium, Oxford: Oxford University Press, 99–177. Mundell, R., (1961), ‘A theory of optimum currency areas,’ The American Economic Review, 51(4), 675–655. Ober, J., (2008), Democracy and Knowledge. Innovation and Learning in Classical Athens, Princeton: Princeton University Press. Ober, J., (2015), ‘Classical Athens,’ in A. Monson, W. Scheidel (Eds.), Fiscal Regimes and the Political Economy of Premodern States, Cambridge: Cambridge University Press, 492–592. O’ Halloran, B., (2018), The Political Economy of Classical Athens: A Naval Perspective, Leiden: Brill. Osborne, R., (1985), Demos: The Discovery of Classical Attika, Cambridge: Cambridge University Press. Osborne, R., (1996), ‘Pots, trade and the archaic Greek economy,’ Antiquity, 70(267), 31–44. Papazarkadas, N., (2011), Sacred and Public Land in Ancient Athens, New York: Oxford University Press, Inc. Pritchard, D. M., (2014), ‘The public payment of magistrates in fourth-century Athens,’ GRBS, 54, 1–16. Psoma, S., (2011), ‘The law of Nicophon (SEG 26·72) and the Athenian imitations,’ RBN, 157, 27–36. Rhodes, P. J., (1972), The Athenian Boule, Oxford: Oxford University Press. Rhodes, P. J., Osborne, R., (2003), Greek Historical Inscriptions 404-232 BC, Oxford: Oxford University Press. Rihll, T. L., (2001), ‘Making money in Classical Athens,’ in D. J. Mattingly, J. Salmon (Eds.), Economies Beyond Agriculture in the Classical World, London, New York: Routledge, 115–142. Rostovtzeff, M., (1936), ‘The Hellenistic world and its economic development,’ The American Historical Review, 41(2), 231–252. Rostovtzeff, M., ([1941], 1953), The Social and Economic History of the Hellenistic World, Oxford: Clarendon Press. Samons, L. J., (2000), Empire of the Owl: Athenian Imperial Finance (Historia Einzelschriften), Stuttgart: Franz Steiner Verlag. Samuelson, P. A., Nordhaus, W. D., (2010), Economics, 19th ed., New York: McGraw Hill. Schaps, D. M., (2004), The Invention of Coinage and the Monetization of Ancient Greece, Ann Arbor, MI: The University of Michigan Press. Schaps, D. M., (2008), ‘What was money in ancient Greece?,‘ in W. V. Harris (Ed.), The Monetary Systems of the Greeks and Romans, Oxford: Oxford University Press, 38–48. Schaps, D. M., (2022), ‘Money, credit, and banking,’ in S. von Reden (Ed.), The Cambridge Companion to Ancient Greek Economy, Cambridge: Cambridge University Press, 237–249. Schefold, B., (2011), ‘The applicability of modern economics to forms of capitalism in antiquity. Some theoretical considerations and textual evidence,’ Journal of Economic Asymmetries, 8(1), 131–163. Semenova, A., Wray, L. R., (2015), ‘The rise of money and class society: The contributions of John F. Henry,’ Working Paper No. 832, Levy Economics Institute of Bard College. Retrieved at: http://www​.levyinstitute​.org​/pubs​/wp​_832​.pdf Shipton, K. M. W., (1997), ‘The private banks in fourth-century B.C. Athens: A reappraisal,’ The Classical Quarterly, 47(2), 396–422.

The Role of Money in the Economy  235 Stroud, R. S., (1974), ‘An Athenian law on silver coinage,’ Hesperia, XLIII(2), 157–188. Thompson, M., Mørkholm, Ο., Kraay, C. M., (1973), An Inventory of Greek Coin Hoards, New York: Numismatic Commission by the American Numismatic Society. Tylecote, R. F., (2002), A History of Metallurgy, London: Maney Publishing. Van Alfen, P. G., (2011), ‘Hatching owls: Athenian public finance and the regulation of coin production,’ in F. de Callatay (ed.), Quantifying Monetary Supplies in Greco-Roman Times, Bari: Edipuglia, 127–149. Van Alfen, P. G., (2022), ‘Monetary networks,’ in S. von Reden (Ed.), The Cambridge Companion to Ancient Greek Economy, Cambridge: Cambridge University Press, 298–312. Van Wees, H., (2013), Ships and Silver, Taxes and Tribute. A Fiscal History of Archaic Athens, London, New York: I.B. Tauris. von Reden, S., (2010), Money in Classical Antiquity, Cambridge: Cambridge University Press.

8

The Athenian Public Sector and State Budget

8.1 The Athenian Public Administration and Its Magistrates According to Aristotle (Ath. Const., 24.3), the Athenian state had approximately 700 archai (public magistrates) in its employ, responsible for providing a variety of services and functions in favor of the state. In principle, they undertook their duties voluntarily (Hansen 1980; Ober 2008, 273; Tridimas 2011, 77; Pritchard 2014, 2015). Their term of office had to be approved by the state authorities, and Pseudo-Xenophon (Con., 3.4) implies that the approval of the popular Assembly of citizens was also required. In other words, democracy did not oblige its citizens to serve the state by force. Those who held public office, on a one-year term basis for most of the posts, exercised their duties based on the decisions taken in the Assembly, the Council and according to the laws and decrees of the state. These formal rules reduced the cost of information, monitoring and enforcement of a range of social practices and laws. In North’s (1990) definition, it could be argued that the Athenian public magistrates were responsible to implement the “rules of the game” in Athenian society. Hansen (1980) accepts Aristotle’s number of 700 magistrates as correct. He further argues that, together with the 500 councilmen, they formed a cadre of 1,200 magistrates. Most magistracies had a minimum age requirement of 30 (as did the courts); for some offices, the minimum age may have been 40 (Hansen 1991, 89). In the late fourth century, Athens had 21,000 adult male citizens, indicating that more than 5% of all citizens were serving as magistrates. For the Athenian state of the fifth century, of a total population of some 350,000 inhabitants (men, women, children, metics, slaves), there were 7,100 citizens who were annually employed and paid in various state institutions, amounting to a fixed percentage of some 2% of the population. Hansen (1979, 1980) has raised some doubts regarding the issue of misthos for serving public magistrates during the fourth century. ΜcAuley (2013, 183), Rhodes (2013, 206) and Pritchard (2014) reject such a view, as most of the Athenians of the middle- and low-income classes of small farmers and thetes would face a severe reduction in income abstaining from personal work to take on public service in favor of the state. Pritchard proposes 403 BCE, the year of the restoration of democracy, as the year in which the practice of paying annual civil servants was adopted. Aristotle (Pol., 6.1317b) conveys the issue of payment for DOI:  10.4324/9781003434146-8

The Athenian Public Sector and State Budget  237 public duties in all branches – be it the Assembly, the courts or the 700 magistracies – as a basic element of democracy because it secured equality among the citizenry in contrast to oligarchy, which is defined by birth, wealth and education. Equality was achieved through the compensatory payments by the state for participating in the above state institutions; as early as 458 BCE, through misthophoria, Pericles instituted remuneration to citizens who temporarily left their jobs to participate as magistrates in the state posts (Aristotle, Ath. Const., 27. 3–4; Plutarch, Per., 9.2–3; van Wees 2013, 70; Pritchard 2015, 20, 31). This measure expanded the possibility of ordinary (middle to low income) citizens participating in public office. Under the same logic, around 403–402 BCE, the ecclesiastikon salary was instituted, which was intended for citizens who participated in the Assembly as a financial motive for participation. According to Aristotle (Ath. Const., 62.2), payment for public duties included 1 drachma for ordinary meetings of the Assembly, 1.5 drachmae for an Ecclesia Kyria, half a drachma for jury duty, 5 obols for councilmen and 1 additional obol to the prytaneis for food. Also, the nine archons got 4 obols each for food, etc. The following Table 8.1 groups all public officials according to their institutional capacity, based on the available evidence. Table 8.1 is an attempt to collect the most important groups of posts of public magistrates in Classical Athens, based on the evidence available in the ancient sources and modern literature. Table 8.1 lists those posts with the most significant impact on Athenian economic and political affairs. There were a large number of them, but it goes beyond the scope of this book to list them all. In this and the following subsections, there is an analysis of each of the posts listed in Table 8.1. In parentheses, the number of magistrates for each post is indicated. Many of these public offices consisted of 10 people, one from each tribe. This was obviously done so that the Athenian administrative system would not be considered to have wronged the citizens and the inhabitants of any one tribe, favoring the others. After all, the Athenian political and administrative system was built on the democratic principle of equality, which aimed at eliminating discrimination at any level, including public administration. In principle, undertaking a post as a public magistrate entailed honors and privileges for their holders. Magistrates were entitled to honorary places in the sacred ceremonies and special seats in the theater. In the performance of their duties, they wore a wreath of myrtle, identifying them as holders of office and that they were due the respect of the citizenry. Steep fines, amounting to 50 drachmae, were levied on citizens who did not comply, while assault or physical violence against a public official was punished as an atimia, which could lead to the deprivation of civil rights or higher fines than those imposed on ordinary citizens (McAuley 2013, 180). The same offenses against a magistrate who was no longer in service were punished less severely because then the victim was treated only as an ordinary individual (Dem., Against Meidias, 33–34). Thus, the Athenian state imposed very severe penalties on those citizens who did not comply, did not recognize the jurisdiction of public officials or insulted them, as disobedience to a public servant was considered not only as a denial to

238  The Athenian Public Sector and State Budget Table 8.1 The Athenian public administration through its magistrates I. Collecting Funds in Favor of the State Hellenotamiai (10) Demosion Kolakretai (10) Epigraphes (?)

Apodektai (10) Poletai (10) and demosioi

II. Market Supervision Agoranomoi (10) Metronomoi (10) Sitonai (10) IV. Auditing of Public Magistrates Logistai (10) Euthynoi (10) III. Judicial magistrates Heliaia judges (6,000) Basileus (1) Grammateus tois Grammateus ton thesmothetais (1) eisagogon (5) V. Other Supervisory Boards Epistatai tou hierou tes Epistatai Agathes Tuches (10) Eleusinothen (7) Epimeletai eis Dionysia Epimeletai ton (10) Mysterion (4) Syllogeis (30) Epimeletai ton neorion (10) Gynaikonomoi Sophronistai and kosmetai (30) VI. Secretaries of State Institutions Grammateus kata Grammateus epi tous Prytaneian (1) nomous (1) Grammateus of the Boule Syngrammateis (mainly of three types) VII. Military Duties Strategoi (10)

Anagrapheus (1) Syngrapheis (?) Taxiarchoi (10)

Peripoloi (?) Katalogeis (10) VIII. Various Other Services Astynomoi (10) Toichopoioi (?)

Tamiai of Athena (10)

Tamiai of the Other Gods (?) Practores (10) Antigrapheus (1) Tamias epi to theorikon (1) Tamias epi to and hoi epi to theorikon Stratiotikon (1) (10) Epimeletai tou emporiou (10)

Sitophylakes (10)

Synegoroi (10)

30 Logistai

Polemarchos (1) Nomophylakes (9)

Thesmothetai (6) Nautodikai (?) and/or Xenodikai (?)

Epistatai Brauronothen (10) Lexiarchoi (6)

Epistatai tou Asklēpieiou (10) Epistataitou Argyrocopeiou (10) Hoi hendeka (11)

Trieropoioi (10) Athenian councilmen (500) Grammateus epi ta psephismata (1) Anagrapheis ton nomon (100)

Lochagoi (28–40)

Hipparchoi (2)

Hodopoioi (5)

Hieron episkeuastai (10) Orphanophylax (1)

Epimeletes epi ton Tamiai epi ton Athlothetai (10) hydaton kai ton tachyploon trieron krounon (1) (1) Tamias tois adynatois Agronomoi and Guardians of the docks (1) hyloroi (?) (500) IX. Responsible for Religious Public Festivals Hieropoioi eis Hieropioioi kat Hieropoioi tais semnais Panathenaia (10) eniauton (10) theais (10) Hieropoioi Eleusinothen Boonai (10)

Grammateus of the Boule and the demos (1) Antigrapheus (1 or 2)

Guardians of the Acropolis (50) Hieropoioi in the Marathonian Tetrapolis (4)

Sources: Andreades (1993), Hansen (1980), Amemiya (2007), Pritchard (2014, 2015), Bresson (2016) and the bibliography in 8.1.1–10.

The Athenian Public Sector and State Budget  239 recognize the jurisdiction of the civil servant but also as an insult and refusal to comply with the rules and laws imposed by the city-state itself. Another important issue regarding the Athenian system of public administration has to do with the election or appointment of a public magistrate. Most of the public magistrates in Classical Athens took their offices by election by lot. The lottery process ensured (political equality) among the citizens and an equal opportunity for all citizens to hold public office; this was a key value in the democratic regimes of antiquity. According to Tridimas (2011, 78), the lottery process in all state institutions and the absence of organized political parties enabled all citizens, regardless of income, to participate in the commons by assuming a state post, and the lottery process reduced corruption and ensured transparency in the selection of public administration executives. MacDowell (1978, 25) writes that an Athenian magistrate could not be expected to have any particular ability, knowledge or other qualifications; he was a layman, not a specialist. However, this is not totally true. Ancient sources reveal that some very crucial state posts which required special knowledge, were filled by appointed, not elected officials. In particular, Aeschines (Ag. Ct., 3.29) specifically describes the existence of public offices which were filled by either klerotoi (elected magistrates by lot) or by cheirotonoi (elected magistrates by vote in the Athenian Assembly). According to Aeschines, all these magistrates were subjected to auditing. Of course, the majority of public offices were filled through election by lot. Aristotle (Pol., 1317.b15–1318.a3) verifies the above views of Aeschines by arguing that some posts required experience and skill; thus, they could not be filled in by laymen. According to Aristotle (Ath. Const., 42.2, 43) these special posts included (see also Lewis (1997, 212)):

• • • • • •

the 10 strategoi the treasurers of the Theorikon and the Stratiotikon funds (see Section 8.3) the epimeletes epi ton hydaton kai ton krounon (see Section 10.1.3) the sophronistai and kosmetai (see Section 8.6) The judges of dikai emporikai (see Section 4.3). The epimeletes tes koines prosodou, the Athenian “Finance Minister” introduced in the fourth century (see Section 8.8.1)

Not using sortition to man these crucial posts proves that the Athenian democrats understood that the sortition procedure also had some limits which should not be exceeded. Election by lot ensured that the key principles of isonomia and isokrateia were present, and they were valid for every Athenian citizen, regardless of income and social status, but there were also some very few exceptions on this rule; the society’s prosperity required some specific positions to be manned only by specialists. 8.2. Public Magistrates Collecting Funds as Public Revenues and the Board of Poletai In Section 6.4, the institutions of apodektai, kolakretai, the Demosion and the merismos procedure were analyzed, among others. In actuality, after 411 BCE,

240  The Athenian Public Sector and State Budget apodektai were entrusted with dioikesis (financial administration between public revenues and expenses so as to implement an efficient public policy). According to Migeotte (2009, 53), merismos estimated future expenses every year and required the good management of finances. The merismos procedure was under the strict supervision of the Athenian Council. In Demosthenes’s time, through merismos, any surpluses created through the Demosion as a part of the dioikesis procedure performed by the apodektai were occasionally channeled (under the supervision of the Council) to either the Theorikon or the Stratiotikon funds for covering specific needs related to the operation of the city-state (Fawcett 2016, 178; Blok 2017, 89). In this respect, the apodektai kept lists of debtors; when these were paid, the apodektai wrote them off. If debtors were insolvent or did not pay their obligations, their punishment was either imprisonment or the doubling of the debt (Arist., Ath. Const., 48.1–2; Papazarkadas 2011, 83–86). There is evidence of the institution of the apodektai on the islands of Paros and Thasos, members of the Athenian Alliance. The fact that such a specialized state institution existed in Athens’ allies as well, allows us to assume that a significant number of those city-states had economic institutions similar to those of Athens, even if less advanced. Similar to the duties of the apodektai were those of the praktores.1 This was a board of ten citizens elected by lot. It kept a register of all the city-states’ debtors and may have participated in collecting these debts (Andoc., M., 77, 79; Dem., Against Aristogiton I, 25.28; Against Macartatus, 43.71; Against Theocrines, 58.20). It functioned in support of the apodektai. The antigrapheus was a magistrate known at the beginning of the fourth century BCE and again in the 330s. In the middle of the fourth century, the office was temporarily abolished, and its powers transferred to the Theorikon fund (Aeschin., Ag. Ct., 3.25). The antigrapheus was responsible for cross-checking all of the Council’s financial transactions (Dem., Against Androtion, 22.38). He was originally elected by a show of hands and later by lot. The epigrapheis, in turn, were in charge of selecting those citizens and metics who should pay the eisphora, the tax intended mostly to cover the state’s war expenses. This was a crucial post; the epigrapheis had to be very cautious in their decisions to ensure that taxation was fair. Accordingly, those taxed with the costly eisphora were chosen according to specific property criteria. Another important practice of the Athenian state was to entrust private individuals or consortia with the exploitation of state property through leasing. As already analyzed, the poletai were in charge of these leases and were responsible for the management of public assets. The provisions for the establishment of this board had already been included in the reforms introduced by Cleisthenes in 508; however, references to the poletai as sellers of public contracts and as being responsible for confiscating property and sacred lands date back to the time of Solon (van Alfen 2011, 2; van Wees 2013, 52–53). In Classical times, the poletai consisted of ten financial managers/public officials, one from each of the ten Athenian tribes, elected for an annual term by lot by each tribe. Harris (2016, 120–124) argues that the poletai were assisted in their duties by a specialized group of public slaves

The Athenian Public Sector and State Budget  241 known as demosioi who were entrusted with the duty of copying and safekeeping the records of land transfers and property. Poletai were directly accountable to the Assembly (Aristotle, Ath. Const., 7.3). They assigned, to the highest bidder, all public contracts, including the leasing of mines and the collection of taxes, upon the approval of the Council (ibid., 47.2–3). In return, the highest bidders for these contracts received a percentage of the proceeds as profit. Thus, the poletai collected leasing fees as well as taxes levied by law on silver mining and all other public property rented out by the state to private individuals for exploitation for a fee. The poletai were also responsible for monitoring the proper implementation of the terms of a contract during the progress of the project run by the private mining contractors (Bitros et al. 2020). Although the relevant data are limited, according to Hansen (1991, 260) and Papazarkadas (2011, 53), the poletai were also assigned to lease the so-called sacred lands. Also, the poletai were authorized to sell to private buyers the confiscated houses and land of those who were convicted by a court decision of very serious criminal offences. The contracts for the sale of these confiscated lands had to be supervised and ratified by the nine archons and by the Council (Rhodes 1972, 97). Furthermore, the poletai were authorized to sell various tax-collection contracts, other than for the eisphora, which was administered at the deme level (Arist., Ath. Const., 47.2–3; Dem., Ag. Tim., 24.97–98, 122). These procedures should be seen as a primitive version of a tax-farming regime (Fawcett 2016, 174).2 In general, by cooperating with private individuals or consortia through leasing and auctioning procedures, the poletai had the opportunity to carry out ­public–­private partnership (3P) duties in favor of the state (and the public interest) as gathered in Table 8.2. All these very profitable remittances were then channeled to the Demosion. Papazarkadas (2011, 55), based on epigraphic evidence (SEG XXVIII 103 III23–4, IG II2 1241 l 52–2, IG II2 2492 l.34–6), argues that, regarding auctions, successful candidates were not shortlisted because auctions were a common practice and the poletai followed open and transparent procedures for granting and monitoring the progress of the lease projects. Aristotle (Ath. Const., 47.2) claims that the land leases agreements were signed between the poletai and the contractor in leleukomena grammateia (whitewashed contracts on which texts were written with charcoal). Table 8.2 State revenues collected through the poletai and the Demosion i) Renting public estates and lands ii) Leasing state and sacred lands such as the mines of Laurion iii) Leasing forests and meadows iv) Performing confiscations upon court decisions v) Accepting court feesa

vi) Collecting the pentecoste vii) Collecting penalties and fines from courts viii) Performing real estate sales ix) Imposing various fees and fines –

The Athenians were extremely susceptible to litigation. Thus, the state's revenues from court fees were not at all negligible. a

242  The Athenian Public Sector and State Budget Depending on the case, the bidder in an auction undertook the exploitation and use of the land for a specific period, usually 4–10 years, but there is at least one case of concession for 20 years that has been recorded (Papazarkadas 2011, 59–60). If the bidder failed to pay the annual concession fee to the state on schedule, he/they forfeited the right to exploit the land, which could then be granted to a new bidder (Langdon 1994, 255). Any bidder who failed to appear creditworthy was fined and had to pay twice the amount of the original concession contract as compensation, and if there was a general inability to fulfill this, he could be publicly dishonored and sentenced to prison (Papazarkadas 2011, 64). It is not clear where these auctions took place and whether they were attended by public officials other than the poletai. Langdon (1994, 256) mentions that descriptions of such transactions have been found on inscriptions in the agora. Like the rest of the public magistrates’ bodies, especially those dealing with financial matters, the poletai, upon the completion of their duties, were subjected to a thorough audit to ensure the best possible level of transparency. This is because the effectiveness of this crucial service was linked, to a significant extent, to the efficient collection of public revenues. 8.3. The Theorikon and the Stratiotikon Funds According to Plutarch (Pericles, 9.1), the theorika were introduced as a redistribution mechanism somewhere between 460–450 BCE, or shortly thereafter. Aristotle (Ath. Const., 41.3) claims, however, that they were introduced at a later time, upon a proposal by Agyrrhios. The majority of recent opinion rejects Plutarch on this, thinking that he has misunderstood his sources. In any case, the theorika was created or reinstated around 350 BCE, after the Social War. They included monetary compensation of 2 obols provided by the state to citizens to attend public theatrical performances (Andreades 1933, 260; Hansen 1991). Thus, the theorika subsidized citizens to attend various entertainment events, such as festivals, sacrifices and games (e.g., the Panathenaia, Dionysia, Eleusinia, Thargelia). In Section 3.2, the important role of the theater for determining the behavior of citizens using the paradigm of Themistocles who managed to spark patriotic fervor in his fellow citizens by reminding them of the Sack of Miletus, was stressed. Some of the expenses for these events were covered by wealthy Athenians as choregoi through the institution of liturgies. The purpose of the theorika was i) to educate citizens by presenting moralistic works, such as the tragedies of Aeschylus, Sophocles and Euripides, or the comedies of Aristophanes, etc. (Kyriazis and Economou 2015) and ii) to recreate the citizens of the polis (Thuc., 2.38) by subsidizing everything from attendance at the theater to sacrifices or public festivals (Dem., Against Neaera, 4; Aesch., Ag. Ct., 25; Arist., Ath. Const., 43.1; McAuley 2013, 183). The ultimate goal of the polis was for every man, as soon as he finished his ephebeia (his military training and duty), to become kalos kagathos, that is, a virtuous and honorable citizen. According to Xenophon (Oec., 14.10), an honorable man was one who:

The Athenian Public Sector and State Budget  243 wants to be praised and honored, and toiled where he should and to risk and abstain from illegal profits. Thus, Xenophon links ethical codes of behavior such as honesty and kalos kagathos to economic activity. And because there was no cinema, television, Netflix, YouTube, Facebook, Twitter, Instagram or any of the other myriad modern ways of sharing and promoting values, messages and codes of behavior today, except the agora, the theater could be seen somewhat like a “Hollywood of Greek antiquity.”3 Demades (Plutarch, Moralia, 1011b) even characterized the theorika as “the glue of democracy.” The values that characterized the success of the Athenian democratic system of governance such as self-consciousness, cooperation, cohesion, homonoia (same-mindness), equality, trust, solidarity, isonomia, isegoria, parrhesia and patriotism were all reinforced through the participation of citizens in the theorika. The Theorikon fund had a chief known as tamias epi ton theorikon (treasurer of the Theorikon fund) who was assisted in his duties by ten additional magistrates (hoi epi to theorikon) under his control. The amount of money contributed to the Theorikon treasury varied between 15T or less and not much under 100T, according to Rhodes (1972, 106). Regarding the Stratiotikon fund (military fund), the Athenian Assembly in 373 voted for the establishment of this new institution, related to the public good defense, responsible for the military expenditures of the state (Arist., Ath. Const., 47.2). The duties of the treasurer of the Stratiotikon mirrored, to a large extent, those of a modern Minister of Defense. The introduction of such an institution shows that matters of defense were a top priority in the minds of the Athenians and denotes the key relationship between economy and war in the perception of the citizens. The creation of this fund should be largely attributed to Demosthenes, and Andreades (1933, 262) accepts this view. In fact, Demosthenes was an opponent of the Theorikon, arguing (from 339 BCE on) that it was a waste of resources. However, after the Social War, which had ravaged the Athenian economy, the city-state’s grand strategy was largely replaced by a pacifist one in which war preparations gave way to extensive public works (of a Keynesian inspiration, one could say, in modern terms) and civil infrastructure. Such a strategy was introduced by two important Athenian personalities of the time: Eubulus, as tamias epi ton theorikon from 354 to 339 BCE, and Lycurgus, as tamias or epimeletes tes koines prosodou from 338 to 323, a post which supervised all the other funds.4 These were four-year posts, including the possibility of re-election. Between 354 and 348 BCE, the Athenians introduced a measure that any surplus in the city-state’s annual budget (known as ta perionta tis dioikeseos) had to be channeled to the Theorikon, which, in turn, circulated the money back into the community by subsidizing everything from attending theatrical performances to public festivals (Dem., Against Neaera, 59.4; Aesch., Ag. Ct., 3.25; Arist., Ath. Const., 43.1; McAuley 2013, 183). However, from 348, based on a proposal in the Assembly by Apollodorus, it was decided that any surplus in the annual budgets would pass to the Stratiotikon and not to the Theorikon. It appears that this decision must have reverted at some point because, from Rhodes (1972, 105), we learn that

244  The Athenian Public Sector and State Budget Demosthenes, who feared the growing power of King Philip II of Macedon, tried hard to convince the Athenians to adopt war preparations and channel any surplus revenues not to the Theorikon but to the Stratiotikon. Aristotle (Ath. Const., 43.1) informs us that the term of office of these two funds ran from one Panathenaic festival to the next. This information is important because it denotes that the term was not for just one year but lasted four years. The above information, as a whole, underscores an intense controversy in Athens, since the middle of the fourth century BCE and on, between the proponents of two dominant and opposing ideologies, one in favor of peace, a pacifist ideology in modern terms, versus a militaristic approach linking economic to military might, advocating the continuation of war as a means of enforcing Athenian geopolitical goals and aspirations (Economou and Kyriazis 2016). The posts in Group II of Table 8.1 were analyzed in Section 5.3. 8.4. Public Magistrates with Judicial and Secretarial Duties Regarding Group III, which is related to the auditing of the public magistrates and the institutions of the ten logistai, the ten euthynoi and the ten synegoroi, a detailed analysis is provided in Sections 8.7 and 8.8. As has already been mentioned, during the fifth century, a committee known as the thirty logistai (accountants) began auditing all public magistrates (including the magistrates of the TTAGs). This group assessed any public magistrate upon completion of his duty. It also supervised payments to and from the treasury temples of Athena and the other gods (TTAGs). It appears, however, that in the fourth century BCE there were three separate groups of logistai with similar yet different and distinct duties. Besides the 30 logistai, another group of only ten logistai is mentioned. These were assisted in their duties by the ten synegoroi (Costouros 1978). The ten logistai and the ten synegoroi were selected by lot by all citizens; they examined the councilmen’s accounts after each prytany as well as those of every other magistrate at the end of their term of office; if any irregularities were found, the magistrates were hauled before a court as the first part of the euthyna procedure, as will be further analyzed in Section 8.8. Regarding Group IV, the judicial magistrates, the responsibilities of the nine archons have already been briefly mentioned. The grammateus tois thesmothetais was the secretary of the nine archons. The grammateus ton eisagogon, was a secretary of the eisagogeis, who were magistrates who brought the Athenian tribes’ lawsuits to court (Arist., Ath. Const., 52.2). There were five eisagogeis, and each one performed services for two phylae (tribes). The nautodikai and their responsibilities were analyzed in Section 4.3. The nomophylakes was a board of seven or 11 magistrates allegedly introduced by Ephialtes. The name of the board, “guardians of the laws,” reveals that the board must have been entrusted with the protection of the law code and the observance of the laws, but nothing more can be inferred from the scanty references (Hansen 1991, 362). Regarding Group V, the grammateus kata prytaneian (secretary for each prytany), also known as grammateus of the Boule (secretary of the Council), was

The Athenian Public Sector and State Budget  245 responsible for keeping a record of what happened during each prytany. An inscription (IG I3 53) from 433/432 BCE verifies the existence of such an institution. Regarding the grammateus epi tous nomous (secretary for the laws), Aristotle (Ath. Const., 54.4) described this post as the magistrate who attended Council meetings, with the duty to make and hold copies of all the laws for reference. He worked under the supervision of the grammateus kata prytaneian. A similar post was the grammateus epi ta psephismata (secretary for the decrees). The duty of this officer was to make and hold copies of the decrees (psephismata) that came before the Council. Regarding the grammateus of the Boule and the demos (secretary of the Council and the people), according to an inscription (IG II2 1740 388/387 BC), this post is attested between the first quarter of the fourth century until the start of the first century BCE. From another inscription (Ag. 15:130), a citizen, Ctesikles, son of Cephisophon of Phaleron, was referred to as holding the post of grammateus. The anagrapheus (scribe) assisted the Council in drafting and recording decrees (IG II2 415; Arist., Ath. Const., 43.229, 53.13–14, 62.231–32). Similar to this post was the anagrapheis ton nomon (scribes of the laws), a commission created in 410 BCE to revise and codify the laws of Draco and Solon (IG I3 104 (409/408 BCE) 5–6) or those laws that were no longer enforced (Arist., Ath. Const., 8.3) or had become out of date (MacDowell 1978, 47). Their work was discontinued at the end of the Peloponnesian War, resumed with the restoration of democracy in 403 and concluded in 399 with the publication of a calendar of sacrifices (Hansen 1991, 348). If one accepts Aristotle (Ath. Const., 30.1), the anagrapheis were a commission of 100 men who were elected by the Council by show of hands. They received a daily wage until their work was completed. Nicomachus’s two terms (six years and four years, respectively) as anagrapheus of the laws, suggests that the anagrapheis commission came to an end once their work had been completed (Lysias, Ag. Nic., 30.2–4; Rhodes 1991, 89). The antigrapheus is known from the fourth century BCE up to the third century AD. The earliest relevant inscription which refers to this post has been dated to 388/387 BCE (IG II2 1740) and the most recent, to 209/210 AD (IG II2 1077). According to Aeschines (Ag. Ct., 3.25), the antigrapheus was responsible for maintaining the Council’s accounts and revenues, which he presented to the Council as a report at the end of every prytany. There is, however, some evidence regarding the possibility that there were two magistrates for this post known as antigrapheis. According to an inscription (SEG 15:104), they may have stored their work in the Metroon. Finally, the syngrapheis were a special committee of experts elected by the demos, charged with the task of submitting, in collaboration with the councilmen, special proposed laws to the Assembly for consideration. 8.5. Providing Various Types of Public Services: Water Management, Defense and Religious Festivals Regarding Group VII, the Athenian city-state provided various kinds of public services. Paramount were those institutions that were related to the public good of defense. I further analyze this category of magistrates in Section 10.2.1.

246  The Athenian Public Sector and State Budget Regarding Group VIII in Table 8.1, first, I refer to the ten astynomoi, who were elected by the Assembly to maintain order and clean the city. Among their duties was overseeing road maintenance; they also had the power to issue penalties for non-compliance. Half of them served in the city of Athens and the rest in the port of Piraeus. Their duties also included supervising and prohibiting any various illegal actions by individuals to the detriment of the public interest, such as houses with balconies with shutters that were extended illegally on the road, or cases of elevated sewers. To ensure this, they could impose heavy fines to those residents who could not conform to these provisions (McHugh 2019, 8; Economou 2023). Finally, they also took care of the removal of any dead bodies from the streets (Arist., Ath. Const., 50). The toichopoioi were a group of ten magistrates who were in charge of building and maintaining the walls of the city. The epimeletes epi ton hydaton και ton krounon was responsible for supervising the distribution of water and maintaining the cleanliness of the wells, fountains and springs. He was assisted in his duties by some officers who were equally responsible for the fair distribution of water among the residents in Athens. Next were the five hodopoioi (road builders), who supervised the repair and maintenance of roads by public slaves (Arist., Ath. Const., 54.1; Pritchard 2015, 83; McHugh 2019, 8). Hieron episkeuastai were responsible for the maintenance of the sanctuaries. The 500 neoroi, also known as the epimelitai ton neorion (guardians of neorion), chosen by the demos, were responsible for the security of the port and its facilities, such as the docks and the neosoikoi (Arist., Ath. Const., 24.3; 62.1; Andreades 1933, 264; McAuley 2013, 181; O’ Halloran 2018, 222). This was important because the strength of the polis in economic and geopolitical terms was based on its naval power. The port facilities (naval stations, triremes and other ships, shipyards, etc.) had to be protected, especially in wartime, from possible criminal or warlike acts such as attempted arson, etc. And the role of the neoroi was crucial regarding this. The tamiai epi ton tachyploon trieron (the treasurers of the high-speed triremes) were in charge of keeping two ships, the Paralos and the Salaminia, in a state of operational readiness. These ships were used on special diplomatic missions or to transport the theoroi, the Athenian sacred ambassadors. The cost for this service was about 16T. These two treasurers also exercised the duties of trierarch on the ships. The operational cost for each of the two boats corresponded to 8T, paid by the state itself, and seems excessive. If the maintenance of a war trireme through the trierarchy cost 4,000–6,000 drachmae per year, i.e., about 0.75–1T, it is not at all known what justified such a high cost to ensure the readiness of these two ships. Perhaps their crews were comprised of the most capable, highly trained staff who, consequently, demanded much higher wages than the average crewman. The maintenance cost of these two special-purpose ships was, in all probability, higher than a normal trireme as well. The ten athlothetai, serving a four-year term, were responsible for preparations for the Great Panathenaic Games as well as their smooth execution. As regards the orphanophylax (guardian of the orphans) and tamias epi tois adynatois (treasurer of the disabled), I shall offer an analysis of the Athenian city-state’s social

The Athenian Public Sector and State Budget  247 welfare policies in Section 10.3. The agronomoi were magistrates responsible for the care and supervision of rural areas. They were also charged with supervising the drainage of rainwater (Arist., Pol., 6.1321b, 7.1331b; Papazarkadas 2011, 221; Bitros et al. 2020, 92). Andreades (1933, 213) characterizes them as a rural police force. According to Aristotle (Pol., 7.5.4), their duties were similar to those of the hyloroi. However, Andreades characterizes the hyloroi more specifically as forest wardens tasked with policing the countryside and forests (Bresson 2016, 321). The guardians of the Acropolis were responsible for the protection of all the structures that were part of the Acropolis complex: the Parthenon, the Erechtheion, etc. Finally, there were various public offices associated with the preparation of religious festivals, such as the Great Panathenaia and the Dionysia. These included the ten hieropoioi eis Panathenaia, the ten hieropioioi kat eniauton, the ten hieropoioi tais semnais theais, the four hieropoioi in the Marathonian Tetrapolis, the hieropoioi Eleusinothen and the boonai. In general, the hieropoioi boards consisted of magistrates who prepared and supervised such festivals as the Panathenaia and were empowered even to impose minor fines (IG II2 334.34). They belonged to the personnel of a temple (von Reden 2010, 164). Finally, the boonai was a board of magistrates elected by show of hands and whose duty was the purchase of sacrificial animals, supplying them to the Panathenaia, the Great Dionysia and other festivals (IG II2 334.16–20; Dem., Against Meidias, 21.171). 8.6. The Supervisory Boards of Public Administration During the third quarter of the fifth century BCE, a major program of public works, including on the Acropolis, was launched by Pericles. The construction of various temples and other structures was overseen by a board known as epistatai (Figueira 1998, 244). Depending on the project, boards consisting of between two to five epistatai were formed that were responsible for supervising the construction. They were nominated by the Council from the lists of citizens. When large sums had to be spent on the construction or maintenance of public buildings or works, the approval of the Assembly was also necessary. Some or all of these boards had a grammateus, some even a syngrammateus (co-secretary). The epistatai were assigned to supervise public building works not only in the twin cities of Athens and Piraeus but throughout Attica as well. Evidence of this post and its duties are found on an inscription (IG I3 32; II2 1672) in which epistatai are described as supervising the treasury of the goddesses at Eleusis as well as other sacred funds. There were various other public offices under the general title of epistatai that were associated with the supervision of various state posts. These included those supervising the proper (economic) management of temples such as the epistatai of the Temple of Agathe Tyche, the epistatai Eleusinothen (supervisors of the Temple of Eleusis), epistatai Brauronothen (supervisors of the Temple of Brauron) and the epistatai of the Temple of Asclepios. The four epimeletai ton mysterion (supervisors of the Temple of Eleusis) had similar duties. The six lexiarchoi were a board of six magistrates who, in cooperation with the 30 syllogeis of demos, had to confirm that only those who were citizens, known as

248  The Athenian Public Sector and State Budget epitimoi, could participate in the popular Assembly meetings (Stroud 1974, 178; Hansen 1980, 160). To achieve this, all the lexiarchika grammateia of the citizens, possessed by the demes, were at the disposal of the lexiarchoi, so that they could check whether those who participated in the workings of the citizens’ Assembly met the criteria. Very harsh punishments (even death) could be imposed on those who tried to participate illegally in the workings of the Assembly. This comes as yet another confirmation of the importance the Athenians attached to the proper function of their “constitution.” Illegal participation in the Assembly was considered tantamount to an attempt to adulterate a voting result. The Athenians believed that such an action could undermine the very essence of their political system; thus, they had decided to punish any trespasser with the severest penalty. The role of the ten epistatai tou argyrocopeiou was analyzed in Section 7.3. The ten epimeletai eis Dionysia supervised the large festival held in honor of the god Dionysus, the central events of which were performances of dramatic tragedies and, from 487 BCE, comedies. After the Panathenaia, it was the second-most important festival. The ten trieropoioi were responsible for the construction of new triremes and the administration of the shipbuilding programs. The so-called hoi hendeka (the 11) was a board of 11 public officials responsible for supervising the desmoterion, the Athenian prison, and for managing cases in which the criminal was caught in the act.5 The hendeka also kept books in which the names of debtors to the state were inscribed, regarded as atimoi (dishonored). Because of this, they were deprived of their rights of citizenship and were unable to hold any office, etc. The hendeka were each paid 4 obols a day (Andreades 1933, 214). In their duties, they were assisted by 300 public slaves from Scythia, known as the Scythian archers (Amemiya 2007, 30, 40). Andreades (1933, 215) believes that the archers’ numbers gradually swelled, particularly on account of the concentration of large numbers of foreigners in Piraeus, until they numbered more than 1,000. The gynaikonomoi was tasked with supervising the public appearance and the morals of women to protect public decency (Amemiya 2007, 11). The ten sophronistai were responsible for educating young Athenian ephebes (19–20 years of age) in the performance of their military duty. They were appointed by the Assembly (Loomis 1998, 24–25). Aristotle (Ath. Const., 42.2.) informs us that those who filled the posts of sophronistai and kosmetai were appointed by the Athenian demos instead of being elected by lot. These two groups of magistrates had similar duties. According to Aristotle, from each Athenian tribe, the children's fathers elected three citizens (30 total) over 40 years of age with a recognized ethical record and the appropriate moral character to undertake the supervision and education of the ephebes. 8.7. State Auditing Institutions to Ensure Good Governance in the Public Sector Effective governance can be achieved by radically combating corruption phenomena in public administration and in general. Corruption reduces foreign direct investments (FDIs) and causes significant problems to the distribution of wealth in

The Athenian Public Sector and State Budget  249 the economy in general (Mauro 1995). The reverse also applies. Technically speaking, an important qualitative issue in ensuring good governance has to do with the auditing of institutions that are related to the supervision of public magistrates. In Classical Athens, there existed a series of auditing mechanisms, held by either the state itself or individuals. Aeschines (Ag. Ct., 3.17–20) writes that: In this city so ancient and so great, no man who has held any public trust is free from audit. Aeschines continues, listing a series of posts of public magistrates which were subject to audit. These passages imply that this was considered a self-evident process concerning every public official. And more importantly, auditing was “blind” in the sense that all citizens, regardless of social status, were accountable to the law and no citizen, especially those holding public office, was “beyond suspicion.” Davies (1994, 204) has found enough evidence to state credibly that the guidelines on which the operation of public services were intended to: (i) maximize participation, and to minimize the concentration of power, by creating new posts or archai rather than give additional jobs to existing archai, (ii) break down the administrative load into chunks which could be performed by amateurs selected by lot, (iii) give them explicit terms of reference and routes of responsibility (iv) operate on the assumption that ‘absolutely nobody is to be trusted. 8.7.1. The Euthyna Procedure

Aristotle (Ath. Const., 54.2, 59.3) conveys that the Athenian demos condemned any behavior of a magistrate related to taking gifts or stealing public funds. In any such case, the guilty public servant was fined ten times the value of the gift or the bribe as punishment. As has already been analyzed, any citizen, before becoming a public magistrate or a councilman, was subjected to the procedure known as the dokimasia. Furthermore, all magistrates or councilmen, and especially those who held offices related to public money management, were also obliged, upon completion of their term (annual in most cases), to be subjected to a procedural accountability. In other words, all state officials were fully accountable for their actions. A public magistrate had to prove that he had not engaged in any illegal acts and that he had performed his duties according to the law, etc. This was a special procedure known as euthyna (Schwartzberg 2004, 312). No magistrate could leave office without undergoing euthyna of how he and fellow members had acquitted themselves in office, especially concerning any public funds under their control (Hansen 1991, 222–224; Lanni 2016, 72). Under such a procedure, sanctions for any malfeasance would fall upon individuals or even upon the entire board (Ober 2008, 157). Our evidence of euthyna during the fifth century is limited. However, we are relatively well-informed on the form that this scrutiny took in the fourth century BCE. In particular, there was a special committee elected from among the

250  The Athenian Public Sector and State Budget members of the Council, known as the ten logistai (ten accountants-auditors) who subjected each public magistrate to a thorough review of how he had performed his duties. The logistai were tasked with checking whether public spending by the magistrates whose duties were related to economic issues, was justified. The ten logistai were active members of the Athenian Council. Their work concerned the capacity of logizesthai (accounting) – that is, they dealt with management control of public money (Arist., Ath. Const., 48.3, 54.2). Within 30 days of the expiry of a magistrate’s term, his accounts were investigated by the logistai (Lys., Ag. Nic., 30.3) and their ten assistants, called synegoroi. These were also councilmen and were chosen for this very crucial post because of their special skills, experience and knowledge of auditing procedures. The ten logistai and their ten assistants were responsible for determining whether the magistrate under examination acted properly. Carrying out this final scrutiny required hard work by the ten logistai and their assistants (Fröhlich 2013, 261). The auditing of a magistrate had to be objective and based on evidence furnished by the records. The auditors had to be impartial and fair while performing their duties (Costouros 1978, 44). In addition to the “programmed” inspection of a magistrate’s service upon the post’s completion, the ten logistai had the right to perform inspections at any time, during and after a public servant’s tenure (Arist., Const., 45.2, 48.3; Hansen 1991, 220–221; Lanni 2016, 72). Obviously, this practice took place to ensure transparency and efficient administration (thus, limiting the phenomena of corruption to a minimum). The public magistrate whose duties were related to economic matters, was obliged to deliver a report within a month after leaving office to the ten logistai. In this report, he had to explain and prove that he had performed his duties per the standing laws and regulations and that at no time engaged in any unlawful activity or misuse of funds. This report was also submitted to the Secretary of the Council (Costouros 1978, 45). The verdicts of the logistai and the synegoroi were then forwarded to the Heliaia court, which decided on the guilt or innocence of the investigated officials. This was the end of the first stage of the auditing procedure. Accusations made during this first stage of euthyna were limited to the financial sphere. In the second stage of euthyna, regardless of whether any misdeed had been discovered, any citizen had the right to register an objection to the euthynoi within 30 days. Lanni (2016, 72) argues that, in this way, the state used state officials to actively seek out and prosecute financial misconduct by magistrates, encouraging informers to report wrongdoing. In particular, the accuser had to write to the euthynos of the tribe to which the accused magistrate belonged. Accusations of any sort could be made (Ath. Const., 48.4; MacDowell 1978, 171). If the euthynos thought the charge had merit, he delivered a formal condemnation, which was passed on for trial by the tribe’s judges if it was a private matter, or to the thesmothetai if it was a “public” issue. Only after the euthynoi had cleared the accused magistrate of any misconduct was he then absolved from any charges relating to the management of his post (Fröhlich 2013, 261). Some further information regarding the Athenian auditing institutions is necessary. First of all, if the logistai or the euthynoi discovered evidence of wrongdoing

The Athenian Public Sector and State Budget  251 during the auditing procedure, the Council could fine the magistrate up to 500 drachmae or appoint prosecutors and refer the case to the Heliaia court to seek a higher penalty. Depending on the offense, the guilty magistrate was stigmatized as atimos, which involved the deprivation of his civil rights, a big fine, perhaps confiscation of property and, in cases in which his actions were considered particularly harmful to the state’s interests, he even faced the possibility of a death sentence. It must be admitted, though, that there were occasional cases of false accusations (Plutarch, Aristides, 26.1). However, these were exceptions to the rule. The complainants were obliged to have solid evidence to back their accusations, otherwise, they exposed themselves to the risk of being countersued for perjury, a crime carrying very severe penalties. Thus, under euthyna, the public magistrates faced strong penalties for any misconduct. Any official who had not submitted his accounts to the logistai was not allowed to leave the country, could not make any votive offering or dispose of his property by will. This meant that if the official was found guilty or engaged in activities related to corruption, his property could be confiscated by the state as compensation for the damage that the state and the public interest suffered due to his activities. The general concept of the smooth functioning of the Athenian public administration was that it was the duty of all state officials to follow the law. Each year, the new members of the Council swore to perform their duties per the laws (Xen., Mem., 1.1.18). Magistrates, upon undertaking their duties, swore a similar oath (Arist., Ath. Const., 55.5). Aeschines even mentions the existence of a state law (ton hypeuthynon nomon) regarding the officials undertaking auditing duties (Harris 2013, 148). Furthermore, penalties were imposed by the state in cases of maladministration. In particular, Lysias (For Mantitheus, 16.7) mentions a case in which citizens who had been chosen to serve as hippeis (because of income criteria) received some financial reimbursement from the Athenian authorities because the maintenance of horses and stables was a relatively expensive process. If the head of each of the ten Athenian tribes made a mistake in the correct registration of the horsemen of his tribe and gave more financial aid to the horsemen of his tribe than they were entitled to, he was obliged to reimburse the state due to his mistake through his personal property (Lysias, Apology for Mantitheus, 7). This case is important because it denotes that the philosophy of the Athenian public administration was to punish the wrong exercise of the public duty by a public magistrate by connecting any kind of maladministration to economic penalties to the careless public official. Penalties were imposed not only on state magistrates but on deme (municipal) magistrates as well. Harris (2013, 75) refers to an inscription (IG ii2 1183) about a decree of Myrrhinous, a local deme, concerning a case (dated after 340) in which an official who managed the deme’s finances underwent an audit of his activities before an elected board of ten men who were to vote with a secret ballot. He could not pass his audit unless a majority of this board voted in his favor. If they voted against him, he had the right of appeal to all the members of the deme. In the event that this group of 30 demesmen voted against him, he was obliged to pay a fine.

252  The Athenian Public Sector and State Budget As a final comment to this section, the high penalties in cases of maladministration or corruption demonstrates the importance the Athenians gave to defending the public interest (related to the overall prosperity of society) against actions that might harm it. Thus, holding a public office in Athens was associated with high responsibility toward society, entailing sanctions in cases of improper administration. Furthermore, the city-state honored public officials who achieved an efficient performance of their duties in various ways (Harris 2013, 27–28). Thus, Athenian society provided positive incentives for the state institutions to function properly. As Sir Winston Churchill famously insisted: “The price of greatness is responsibility.” 8.7.2. Auditing Institutions to Ensure Good Governance in the Public Sector through Private Initiative

As has already been mentioned, after their term of office, public magistrates were required to submit their accounts to the ten logistai. What must be emphasized, however, is that individuals could also contribute to the auditing process, in addition to the logistai. In particular, as has already been mentioned, any citizen could make a charge against a public magistrate (or a group of magistrates) and bring it before the ten euthynoi (Aeschin., Ag. Ct., 3.18–22; Arist., Ath. Const., 48.3–5; Harris 2013, 27). Any citizen could accuse any officeholder of not correctly fulfilling his task, abusing his position, acting against the public interest, or being corrupt (Arist., Ath. Const., 61.2; ΜcAuley 2013, 186). According to the apocheirotonia procedure, a vote was taken in the Assembly by a show of hands whereby a magistrate was suspended from office until the Heliaia court had heard the charge brought against him for misconduct in office (Hansen 1991, 220–221, 349). If the accusation of misconduct was proven true, the public servant was dismissed from office and was further subjected to the sanctions of the law (Arist., Ath. Const., 43.4, 61.2). Fröhlich (2013, 265), based on Diod. Sic. (15.72.2) argues that this institution existed not only in Athens but also in other Greek states. This institution is related, to some degree, to modern practices such as the recall procedures followed in advanced democracies such as Switzerland and the United States (Cronin 1999; Matsusaka 2005a, b). Effective auditing institutions aimed at securing transparency is an intertemporal issue that is crucial for the success of public administration in modern democracies. Further, with the procedure of eisangelia, probably introduced by Cleisthenes in 507, during Ecclesia Kyria, any citizen had the right to denounce any state official to the Assembly and to the Council on the grounds of one or more of four serious public offenses: i) an attempt to overthrow democracy; ii) treason against the state; iii) bribery, corruption or misconduct (in general) of public servants in office; and iv) mistreatment of war orphans and women who were epikleroi. If the Assembly or the Council were convinced that there was a valid case to consider, it then decided whether to discuss the case at a special meeting of the Assembly itself or to refer it to the courts for trial (Arist., Ath. Const., 45.2; Hansen 1991, 221–222,

The Athenian Public Sector and State Budget  253 353; Thorley 1996, 31; Harris 2013, 28; ΜcAuley 2013, 186). The accused could defend himself either in front of the Assembly or (depending on the type of accusation) in the courts. The notorious trial of the generals after the Battle of Arginusae in 406 was the result of an eisangelia and reveals the power held by the Assembly, for good or ill, over the officers of the state. In general, the Assembly took a vote about the conduct of officials once every prytany, that is, ten times a year; if the official did not win a vote of confidence, he was deposed and stood trial. As a final comment, the procedures described in this section illustrate the mentality of the Athenians regarding the issue of good governance. Effective auditing of public administration was not the exclusive province of authorized state agencies (logistai, synegoroi, euthynoi, Council) to handle; the citizens themselves, to some degree, also acted as guardians of the state, protecting it from the phenomena of delinquency and corruption by their right to denounce any such case to the appropriate judicial bodies or in the Assembly of citizens. This mentality of defending the public interest, which is also related to the concept of parhessia, was emphasized as crucial for the prosperity of a nation by eminent philosopher J.S. Mill when he argued in the “Introduction” of his essay On Liberty ([1859], 1998) that: A person may cause evil to others not only by his actions but by his inaction, and in either case, he is justly accountable to them for the injury. 8.8 How the Athenian State Budget Was Determined Public revenues (PRv.) refer to the cumulative fiscal cash flows through which a state can provide a number of services toward its citizens, such as public works and infrastructure (roads, hospitals), defense expenditures (e.g., construction of triremes) and transfer payments such as compensations to war invalids incapable of work, to the impoverished elderly, to the afflicted and to orphaned children, etc. All these constitute what is today characterized as a welfare state. Public expenditures (PEx.) refer to the expenses of the state for servicing those obligations. It is known that when:

(PRv.) > (PEx.) the annual budget of the state is in surplus.

(8.1)



(PRv.) < (PEx.) the annual budget of the state is in deficit.

(8.2)



(PRv.) = (PEx.) the annual budget is counted as balanced.

(8.3)

For a city-state like Athens, efficient public finance was a matter of exceptional importance, and the political programs of its greatest statesmen always focused on sound management of fiscal policy. Financial issues appear in forensic and declamatory speeches (Andreades 1993, 197–198). The Athenian Council was responsible for supervising Athens’ fiscal position, and only this body had access to the information which would show whether the state could afford any additional

254  The Athenian Public Sector and State Budget public expenditure (Rhodes 1972, 105). Citizens could be informed regarding the financial status of the state through the Assembly procedures (Pritchard 2015, 31). Table 8.3 provides a composite synthesis of Aristotle’s (Ath. Const., 24.3) and Andreades’s (1933, 264) sources and shows an approximation of the number of public magistrates that the Athenian state budget had to pay on the eve of the Peloponnesian War. It takes as the status quo that the Athenians had two squadrons of 20 triremes in total (4,000 crew) in operational readiness before the war as well as 20 ships for collecting tribute from their allies (2,000 crew in total) – thus, 40 ships in total. According to Andreades, if those who received a free meal in the Prytaneion, the prison guards and those receiving social security (disabled persons invalid and crippled soldiers) are added, we reach a number that exceeds 20,000 individuals. In Table 8.3, these groups of people are identified as “Other Groups.” Table 8.4 presents the formulation of the Athenian budget according to Andreades’s estimates (p. 266) during the period of the Peace of Nicias. Ober (2015a, 501) clarifies that between 447 and 425, Athens spent approximately 8,000T on public buildings (notably the great Acropolis project) and their furnishings, including the extraordinary cult statue of Athena in the Parthenon. This came to an annual expenditure of over 350T per year. In general, he thinks that a mean figure of 700T to 800T for annual state expenditures in the fourth century seems reasonable. As a measure of comparison, Kyriazis (2009) estimated the budget of the Athenian state in the 340s as 400T, and it is known that the Athenian budget rose to the impressive figure of 1,200T by 323 BCE. Table 8.3 Total number of employees in the public sector in 431 BCE State Post Heliastic court judges Council (of the Five Hundred) Archai (officials at home) Officials abroad Guardians of the docks Guards of the Acropolis Cavalry Infantry (hoplites) Archers Fleet: 20 triremes and 20 tribute collection ships Other groups Total

Number 6,000 500 700 700 (?) 500 50 1,200 2,500 1,600 6,000

(?) ≥ 20,000

Table 8.4 The formulation of the Athenian budget in 431 BCE (in talents) Budget Main Category

Talents

Military and naval expenses Civil servants’ payments The cult budget, public works and other expenses Total:

300 250 150 700

The Athenian Public Sector and State Budget  255 According to Hansen (1991, 150, 255), the running expenses of the Assembly and the Council cost about 45T and 15T, respectively. Hansen (1991) and Kyriazis (2009) estimated that during the 340s, the Assembly cost 45T, the Council 15T, courts 22T–37T, honorary decrees 10T, the youth’s ephebeia 25T and fodder for the cavalry 40T, for the same period. Of course, there were various other expenses such as the theoric payments, which included social measures such as relief for the poor, upbringing of children whose fathers had died in war and various types of public goods such as police services (i.e., the Scythian archers), defense expenditures and infrastructure (fortifications, roads, neosoikoi and naustathnoi, etc.). Public revenues and expenditures varied, perhaps significantly, between the fifth and the fourth centuries, especially because, after 404 BCE, Athens was deprived of revenues from its allies. Table 8.5 below exhibits the Athenian state budget c. 435 to 330s based on Ober (2015b, 499), who makes a synthesis based on his own estimations as well as those of Hansen (1991), Pritchard (2012) and Gabrielsen (2013). As has already been mentioned, as its principal strategy, the Athenian state had public revenues not to exceed the public expenditures so that the budget is always balanced. This provision is mentioned by Aristotle (Pol., 1314b4–5; Oec., 2.1348b). Aristotle’s call for fiscal discipline is an intertemporal issue that is constantly returns to the public debate regarding the ideal mixture of fiscal policy measures of a state. For example, the European Union (EU) has to consider the failure of various member states to comply with the fiscal adjustment rule of the Maastricht Treaty, which led to the creation of the euro. It required that the deficit to gross domestic product (GDP) ratio and the debt to GDP ratio not exceed ­reference values of 3% and 60%, respectively. But this has not been adhered to with care and diligence and at the end of 2022, 13 out of the EU-27 member states, almost half of them had a public debt of more than 60% as a percentage of the GDP.6 Table 8.5 Athenian budget c. 435–330s (in talents) c. 435

c. 425

c. 370

354

c. 340

330s

Public Spending Military Government/Law Festivals Welfare Building Total

400 100 100 50 350 1,000

1,500 100 100 50 100 1,850

350 100 100 40 75 665

130 75 100 30 0 335

200 100 100 50 50 –

400 120 150 100 200 970

Public Revenues General Mint (maximum) Total Loans (internal) Surplus or Deficit

1,000 300 1,300 250 300

1,500 100 1,600 250 0

600 50 650 -15

130 150 280 -55

400 100 500 0

1,200 150 1,350 380

256  The Athenian Public Sector and State Budget In recent years, judicially enforceable fiscal rules, such as balanced budget requirements and expenditure limits, have become increasingly popular around the world in countries struggling to limit their public debt. The consequences and the negative side effects when fiscal discipline fails are harsh fiscal adjustment measures such as those imposed on modern Greece, Portugal, Ireland and Cyprus with the so-called memoranda agreements during the 2010s (Kyriazis and Economou 2016). Another relative paradigm comes from the USA. According to data from the International Monetary Fund (IMF) Federal Reserve Bank of St. Louis, the Gross Federal Debt as a percentage of GDP in the United States, which began to gradually increase sometime in the mid-1970s, will be more than 130% for the fiscal year 2026, with an accelerating trend. Of course, the recent rise of this ratio is significantly reinforced, among others, to the attempts of the US administration to finance measures to forestall the consequences of the COVID-19 crisis and finance Ukraine in its war with Russia.7 Bitros et al. (2020) analyzed this crucial fiscal discipline aspect of the Athenian public revenue policy, in contrast to the current practice in the world system, of creation and accumulation of debt for populist, clientelist, re-election purposes and other reasons by democratic governments, resulting in a massive expansion of public debt that threatens the foundations of the world economic order with a new great recession such as those of the Wall Street crash of 1929 and the 2007/2008 subprime mortgage financial crisis. To avoid fiscal discord, through the Council, the Athenians supervised the management of the state budget so that no excesses emerged. Authors specializing in the ancient Greek economy, such as Amemiya (2007, 91), accept that the Athenians had acknowledged the importance of balanced budgets. In particular, the Athenian Council prepared and proposed a balanced state budget (Andreades 1933, 369; Bitros et al. 2020, 53). In other words, the principle of fiscal discipline was a jurisdiction of the Council. State revenues were determined under its oversight. The responsibility for the collection of these revenues, as well as their supervision, also rested upon the Council’s shoulders. Importantly, Migeotte (2009, 54) adds that the requirement for annually balanced budgets was not only an Athenian practice but a general phenomenon that characterized the Greek city-states. During times of war, Athens borrowed massively from the TTAGs. After the wars, these loans, plus interest, were repaid through budget surpluses. But there was a case in which the Athenians denied public debt repayment in 404/403 as a result of the devastating economic consequences of their defeat to Sparta during the Peloponnesian War. As Pericles predicted, by drawing on the limited capabilities of Athens to conduct protracted wars, the huge loans accumulated during the 30 years of the Peloponnesian War could not be repaid, and Athens went bankrupt in 404/403 BCE. But this incident arose from extremely unfavorable fiscal conditions and was an exception to the rule. The Athenians, understanding the necessity of trust and reputation, did not ever repeat this extraordinary measure. In fact, it is known that in the following Hellenistic period, there existed institutions empowered to enforce debt repayment, such as in the case of the Aetolian League and with the already mentioned case of Nicareta from Orchomenos, a city-state of the Boeotian League, and her dispute with this city for financial issues (see Sections 5.10 and 6.4).

The Athenian Public Sector and State Budget  257 By considering the analysis and the related bibliography in this and the previous sections, as well as the findings of Andreades (1933, 292–298), Kyriazis (2009), Gabrielsen (2013) and Fawcett (2016), Tables 8.6 and 8.7 present the main channels through which the Athenian state budget was financed. Some explanations are required concerning Table 8.7. Revenues were strongly linked to taxation/custom duties. The most common Greek word for tax is telos. Tax exemption was called ateleia, and the person enjoying it ateles. Table 8.7 refers to the most important of them: the pentecoste (2% tax on the value of a good). Many other states also introduced and profited from pentecoste such as Ceos, Cimolos, Cnidus, Delos, Epidaurus, Erythrae, Halicarnassus and Troezen (SEG 44.710 31). There were some further categories of customs duties depending on the kind or the destination of a good. For example, the decate (10% tax on a good’s value) was related to goods originating from the Black Sea. The eicoste (5% tax on a good’s value) and hecatoste (1% tax on a good’s value) were customs duties similar in nature. The dodecate (8.33% tax on the value of the corn) was the result of a graintax law. The ellimenion (2% tax on a good’s value) was related to harbor duties concerning the mooring of foreign merchant ships in the ports of Piraeus. The epibatikon tax was paid by the uploaders of goods transported by sea to the twin city of Athens–Piraeus (Gabrielsen 2013, 337–340). However, Fawcett (2016, 170) argues that the epibatikon tax was a disembarkation tax and, in general, concerned all travelers to Athens and Piraeus. These kinds of taxes were introduced by other city-states as well. For example, the dodecate was also introduced on the islands of Lemnos, Imbros, Skyros (Gabrielsen 2013, 338–339) and perhaps elsewhere. There was also the diapylion, a customs duty on goods imported into Athenian markets by land. Something must also be said regarding euergetism. According to Gygax (2016), who extensively researched the issue, euergetism had to do with the voluntary financing of public buildings, festivals and city institutions, such as schools, as well as the distribution of food or money by individual citizens, foreigners, kings, etc. The rewards of the euergetai (benefactors) essentially had to do with the posthumous fame of having their names inscribed on a monument, an honorific stele. Finally, regarding taxes at the deme level, Gabrielsen (2013, 337) mentions such a case by referring to an inscription (IG II2 1186, l. 25) which notes “the taxes over which the Eleusinians are masters,” implying that these taxes were imposed on the Table 8.6 Means of collection and increase of public revenues

• • • • • • • •

Demosion (including the categories of remittances paid to the Poletai – see Table 8.2). AF (till 404 BCE). TTAGs. Increasing currency production by the state mint of the internationally accepted drachma. War booty. Liturgies and epidosis (see below on epidosis). Other taxes (in general, such as metoikion, eisphorai taxes on wealthy citizens and metics, etc.). Wealthy individuals – lenders (especially during the Hellenistic period).

258  The Athenian Public Sector and State Budget Table 8.7 Sources of public revenues of the Athenian city-state Regular State Revenues Leasing of Land

Taxes on Imports Metoikion Xenikon Court Fees Penalties Pornicon Religious Taxes

Public property for exploitation through leasing practices (usually for a period of ten years), such as silver mines, agrarian land and places of worship to a wealthy private citizen or consortium through an auction. The rent was paid to the board of poletai, who then transferred these remittances to the Demosion. Customs duties imposed on various products already imported into the polis, such as the pentecoste (2% tax), eicoste (5% tax), decate (10% tax), dodecate (12% tax on grain), hecatoste (1% tax), ellimenion, epibatikon and diapylion. Payment of personal tax imposed on metics. Similar to the metoikion. Between parties due to the use of judicial services of the state. Revenues from penalties imposed on citizens, metics or slaves resulting from violations of the law (see Table 8.8). Taxation on prostitution. A number of religious taxes were introduced based on property and income criteria. They were collected at the deme’s level.

Irregular State Revenues Eisphora Property tax on wealthy citizens and metics (see Section 8.9.1). TTAGs The state could borrow money from the TTAGs with a low interest rate. War Booty War booty from looting rival city-states could increase, to some extent, state revenues. State Revenues Originating from the Private Sector Liturgies A special type of taxation burdening only the wealthy citizens and metics (See Section 8.9.2.). Euergetism The voluntary financing of public buildings, festivals and city institutions, etc. Epidosis Formal appeals by the state authorities to residents or citizens to come forth and donate money to the state (see Section 8.9.1). State Revenues from Allied Contributions Hellenotamiai They collected revenues from the allies of Athens for defense purposes. Demes Taxes Enktetikon Citizens paid a small tax to the local deme of their residence based on property and income criteria.

citizens of Eleusis at the local level. Eleusis was a deme of Attica, belonging to the phyle Hippothontis. Further, according to Fawcett (2016, 167–168), there was a tax named enktetikon, which seems to have been a small tax to the local deme based on property and income criteria. Metics paid the so-called metoikion, an annual tax of 12 drachmae for men and 6 drachmae for women (ibid., 337, 341). Amemiya (2007, 97) informs us that the metoikion amounted to 75T in the late fourth century BCE. This tax must be related to the fact that metics, while not being citizens of Athens, benefitted as common citizens by using the Athenian economic infrastructure for any kind of personal gain such as profit-making. Furthermore, metics did not have the right to own land

The Athenian Public Sector and State Budget  259 (Lewis 2018, 36). The punishment of not paying the metoikion was severe; the metic could be sold as a slave (Lyttkens 2013, 107). This was a very powerful measure of persuasion for metics to be very consistent in paying the metoikion and, in general, their overall tax obligations (e.g., fulfilling their eisphora or liturgies obligations, accordingly). In addition to the metoikion, each metic had to appoint an Athenian citizen as his “family protector” known as prostates. Failure to fulfill this requirement led to the so-called dike apostasiou (trial for lack of patron) and, based on the outcome of this trial, the metic could be sold into slavery (Lewis 2018, 73). Manumitted slaves (freed men) were often granted metic status at Athens, with the former master as prostates (Harris and Lewis 2016; Jew 2022, 214). Lewis (2018, 84) writes that metics had the right to choose their prostates. There were also a number of religious taxes. Gabrielsen (2013, 341) informs us that in 434 BCE, the Athenians, to finance the cult of Apollo, introduced a small annual tax collected by the local demarchs in every deme based on property and income criteria. The hippeis socio-economic group of citizens had to pay 2 drachmae, the hoplites 1 drachma and the archers, belonging to a lower income class, 3 obols. Demarchs had the right to withhold part of the misthos (salary) of those citizens who did not comply and did not pay. Table 8.8 refers to a series of procedural offenses which, when committed, could lead the parties involved to the courts. Penalties were imposed as well as Table 8.8 Fines imposed to protect the public interest and to solve disputes between parties Legislation

Aim of Legislation

An action brought before the thesmothetai at Athens against an individual who worked a mine without having previously registered it. The state required that all mines should be registered. Graphe anupographou Penalty for exceeding the limits of exploitation of the (silver) resource. metallou Penalties regarding differences between business partners who were Dike metallikes exploiting the silver mines. Lawsuits for breach of trade agreements between parties. Dikai emporikai Fines levied on projects delivered by the private to the public sector Dike kakotechnion that were of poor quality. Fines due to obligations of debtors. Dike chreous Penalties in case a guarantor did not meet his obligations. Dike eggues The lender claims a refund. Dike aphormes Dike parakatathekes Penalty for the return of a deposit. Penalty for delay in returning a dowry. Dike proikos Trial regarding disputes on agricultural production. Dike karpou Claim for non-payment of rent. Dike misthoseon Claim on assets (property). Dike ousias Penalties for putting up obstacles to a sale-transfer of property. Dike aporreseos Penalties due to differences between partners in a company. Dike koinonike Dike trierarchike Penalties due to differences between a trierarch and his predecessor. Dike apostasiou Trials to those metics who failed to appoint a citizen as a protector for them and their families. Agraphou metallou graphe

260  The Athenian Public Sector and State Budget fines collected by the state. Thus, these trials provided revenues to the state budget. There were specific laws that covered the parties even in complex procedural cases. Legal coverage for specialized legal issues of an economic nature is found only in developed economies, such as those of today in the Western world. 8.8.1 Managing the State Budget: The Merismos and the Tamias Tes Koines Prosodou

Table 8.9 summarizes the findings up to this point regarding the collection and allocation of public revenues to state authorities. Table 8.9 explains how the Athenian “mega-funds” (Demosion, Alliance Fund (AF), TTAGs) managed their annual remittances. It divides this analysis into two periods – 478–404 and 403–323 BCE – as there were differences in these procedures. Table 8.9 innovatively shows the procedures that the Athenian policymakers followed regarding the provision of public goods: i) in the event of public surpluses and ii) in the event of deficits. Table 8.9 Managing the budget of the Athenian mega-funds Fifth Century (478–404) In Case of Cash Surpluses Demosion Various archai were paid with money from this fund. Surpluses were transferred to the TTA. AF In principle, surpluses were granted to the TTA to cover public building programs (including temples) or theatrical plays (such as the theorika). The possibility that a portion of these surpluses would remain in the AF chamber in the Opisthodomos for future use cannot be ruled out. TTAGs Surpluses were available to be offered as loans to either the state (mainly) or to individuals. In Case of Cash Deficits Demosion Demosion deficits toward various archai could be covered either by the Demosion’s accumulated surpluses from previous years, or (possibly) by low-interest borrowing through the TTAGs. AF To cover their annual deficits, the hellenotamiai could borrow from the TTAGs. TTAGs The TTAGs could cover their deficits by cash reserves stored on them from previous years. Fourth Century (after 404 BCE) In Case of Public Surpluses Demosion Any surpluses after merismos and dioikesis were transferred either the Theorikon or the Stratiotikon funds depending on the situation. TTAGs Surpluses were available to be offered as loans to either the state (mainly) or to individuals. In Case of Public Deficits Demosion The Theorikon and/or Stratiotikon funds could not be subsidized by the Demosion. In such a case, depending on the situation, in all probability, both the Theorikon and the Stratiotikon funds could take loans from the TTAGs (mainly the TTA) to cover pending fiscal needs. TTAGs TTAGs could cover their deficits by cash reserves stored from previous years.

The Athenian Public Sector and State Budget  261 In effective public administration, it is crucial not only to establish efficient revenue collection mechanisms but also to efficiently manage and allocate the funds to the various public services to successfully provide a series of public goods. As has already been analyzed in Section 6.4, this procedure was called merismos. Till 403, there was a close cooperation regarding dioikesis, that is, the efficient management of the public budget among the apodektai, the hellenotamiai and the Council (IG i3 52.A6–7, 9–12; Pritchard 2015, 30). Rhodes (1972, 89) characterizes the Council as generally responsible for the financial well-being of Athens, and he adds (pp. 104–105) that the Council: watched over the activities of the sacred treasurers, the poletai, and the [apodektai]; in the fifth century it controlled the [kolakretai], and in the fourth it appointed a board of logistai…to examine in each prytany the accounts of those who received an allocation of public money for their expenses. Each of these officials or boards was involved only at one point in the state’s finances; the Boule was involved at every point, and it alone could see the whole picture. After abolishing of the hellenotamiai, the apodektai continued the duties of the former – that is, receiving revenues from various sources such as the board of poletai, and performing dioikesis – but any possible public surpluses that remained to the Demosion after the merismos were no longer transferred to the TTA but, rather, transferred to two newly formed funds: either the Theorikon or the Stratiotikon, depending on the particular case (McAuley 2013, 183; Rhodes 2013, 217; Fawcett 2016, 178; Blok 2017, 89; Bitros et al. 2020, 34–38). On the other hand, as already mentioned, in case either the Athenian fiscal archai or the hellenotamiai borrowed money from the TTAGs, mainly from the TTA, these remittances would have been paid back to the TTAGs sometime in the future, plus interest. For the 478–404 period, the overall supervision regarding dioikesis was entrusted to both the Council (in practice) and the Assembly (in principle), while for the 403–323 period, it was entrusted to the Council and the epimeletes tes koines prosodou (in practice), and the Assembly (in principle). The tamias or epimeletes tes koines prosodou, known also as the tamias epi tes dioikeseos, was a very important post that was in charge of the overall supervision of the system for collecting and dispensing public revenues and reporting to the Assembly. He was the chief among all tamiai in the Athenian dioikesis. To carry out his coordinative duties, he was assisted by poristai, a body of civil servants who were involved in handling revenue. Τhis “chief tamias” (chief-treasurer) was introduced during the fourth century and, because he had to be a financial expert, he was elected annually by vote and not by lot (Lewis 1997, 226; Bitros et al. 2020, 36, 42). This crucial coordinative post has not yet received the weight it deserves in the international literature, probably because the ancient primary sources that refer to it are very limited. The practical proof of its importance is further elaborated in Section 9.2.1 in which the fiscal measures taken by Eubulus and Lycurgus are discussed. Table 8.10 presents

262  The Athenian Public Sector and State Budget Table 8.10 The sophisticated system of the Athenian financial administration in the fourth century BCE Dioikesis Merismos Procedure Collection, allocation, management and channeling of the public revenues to various state services to efficiently implement public policy by covering the costs for the provision of various public goods, 3PPub.Gs and Pub.PriGs.

Tamias (or epimeletes) tes koines prosodou

MECHANISMS FOR THE COLLECTION OF PUBLIC REVENUES

- Apodektai - Poristai - Poletai - Tamiai of Demosion (any surpluses were channeled to: Tamiai epi ton theorikon or Tamiai ton Stratiotikon) - TTAGs (TTA + TTGs)

MECHANISMS FOR COVERING PUBLIC EXPENDITURES

-Special magistrates (not kolakretai after 414 BCE onwards) being responsilble for paying the state magistrates (the archai, the Assembly, the Council, the heliastic courts etc.)

Public Revenues (PR) Such as renting public estates and lands; imposing various fees and fines; leasing state and sacred lands, forests and meadows etc.; performing confiscations upon court decisions; collecting the pentecoste; performing real estate sales. Public Costs (PC) Such as paying the (more than 20,000 public magistrates) known as the archai . IF : PR > PC IF : PR < PC

Public surpluses – efficient The state financial institutions and management the TTAGs as QSIs could store money for future usage. Public deficits The state could borrow money from the TTAGs or individuals to cover its annual budgetary needs.

an overview of the operation of the Athenian dioikesis during the fourth century BCE. In general, Tables 8.1–8.10 prove the high complexity but, at the same time, the highly sophisticated institutional mechanisms that the Athenians developed to ensure the proper management of their annual state budget and achieve efficient

The Athenian Public Sector and State Budget  263 public administration. I believe (and hope) that the synthesis of Tables 8.6 to 8.10 in particular, solves many open issues or ambiguities among prominent historians and other social scientists on related issues. On this, Rhodes (2013, 227) wisely writes: By the late archaic period Athens was already a developed state, with developed financial mechanisms and officials. In the classical period the elaboration increased, with a larger number of citizens and a larger proportion of the citizens involved in public affairs, and with the Delian League to administer for much of the fifth century and the Second League in the middle of the fourth. This meant that Athens had more need to develop skill in organizing its public finances than smaller states with simpler financial profiles. Van Alfen (2011, 6) adds: In general the Athenians sought to construct a public and imperial finance system that was deeply rule oriented, transparent, and exacting in its details, but necessarily flexible in fulfilling its general mission. 8.9 The Athenian Taxation System For a detailed inquiry into the taxation system of Athens in Classical times, one can consult Christ (2006) and Lyttkens (2013), among others. A general feature of taxation, not only in Classical Athens but, apparently, in the majority of other Greek city-states as well, was that citizens were not subjected to tax obligations. But under extraordinary situations, wealthy citizens and metics could be subjected to progressive taxation when conditions demanded it (war, natural disasters, etc.). 8.9.1 The Eisphora Tax

The eisphora extraordinary type of taxation (eisphorai, in plural) was linked to the extent of a citizen’s property (Arist., Ath. Const., 35; Andreades 1933, 340; Christ 2006, 146; Fawcett 2016). It was levied on the wealthiest 6%–8% of the population (Ober 2015b, 509). Eisphora was considered as a kind of service to the state (Tridimas 2020). Mattingly (1968, 455) adds that the eisphora was always unpopular with those whom it affected, and it is clear that the Athenian state resorted to it only when public reserves were about to be depleted. Gabrielsen (2013, 342) argues that not only citizens and metics but also corporate bodies such as demes were liable to it. During the first half of the fourth century BCE, the 2,000 or so richest men (roughly the top 5%) paid the eisphora (Hansen 1991, 108; Ober 2008, Patriquin 2015, 43). For the imposition of the eisphora, a relevant decision had to be made by the Assembly regarding its necessity.

264  The Athenian Public Sector and State Budget Gabrielsen (2013, 342, based on the inscription IG I3 52), believes that, in Athens, the eisphora was first imposed in about 434/433. This contradicts Thucydides (3.19.1), who argues that the eisphora was first imposed 428/7 BCE, in the amount of 200T due to the high cost of the Peloponnesian War, a view accepted by Andreades (1933, 333). Canevaro (2018) also notices this mismatch between Thucydides’s narrative and the inscriptions found and further mentions that some authors argue that it first appeared in 378/7. Hansen (1991, 113) links the symmoriai system with the eisphora, mentioning that by a law proposed in about 358 by one Periandros, the symmory system was extended to cover the trierarchy as well as the payment of eisphora. Serrati (2013, 329) argues that the eisphorai greatly increased during the fourth century and eventually became annual in 347. From 347/346, the eisphora became a regular annual tax of 10T, but the Assembly could always impose extra eisphorai (Hansen 1991, 112).8 The imposition on a permanent basis of such a tax may be the first known case in which a democratic body of citizens decided to impose a progressive property tax and use these proceeds to finance programs that benefitted the poorer citizens – at least to some extent (Bitros et al. 2020, 40). Blok (2017, 273) adds that in the Classical period, eisphorai were levied on all free residents whose property was valued at more than a certain amount; wealthy metics fell under this tax regime as well, but because they normally did not own land, their wealth was measured differently. The collection of taxes was auctioned off and entrusted to individuals or individual consortia. These tax collectors were called telonai and had employees to assist them in collecting taxes. Telonai were paid by withholding a certain amount of fees for the provision of this service to the state (Lyttkens 1994, 71). This was an obvious tax-farming procedure (Lyttkens 2013, 100–102, 107). Tax-farming was another successful paradigm of 3P that was practiced in Classical Athens. 8.9.2 The Liturgies

Other than the eisphorai, the other main type of tax burden on well-to-do Athenians was the so-called liturgies. In fact, it was a direct type of taxation imposed on wealthy citizens and metics. Liturgies were introduced as a state policy to cover part of the public expenditures, such as trierarchy, and to carry out redistributive policies – the transfer of wealth from the rich to low-income people (Ober 2017). This wealthy class consisted of 300–1,200 individuals from the total citizen population of 50,000 in the fourth century BCE. As already mentioned, due to a law proposed by Periandros and accepted by the Assembly in 358/357 this number was increased to 1,200 citizens representing about 4% of the estimated 30,000 Athenian citizens. Günther and Hahn (2019, 178) argue that the richest 5% of citizens often provided liturgies for the demos. Under normal circumstances, wealthy metics who participated in liturgies never became trierarchs. According to Gabrielsen (1994), the Athenians view the trierarchy as a tax. Christ (2006, 146, 151) informs us that some high-ranking officials, such as the nine archons and others (most likely

The Athenian Public Sector and State Budget  265 generals), were excluded from the cost of the trierarchy. It is logical to assume that, upon completion of their duties in these posts, the wealthy archons could again become eligible for trierarchy. Each year, the appropriate magistrates formally announced the liturgies to be performed and called for volunteers. If the number of volunteers was smaller than the number of liturgies, the magistrates called upon wealthy citizens who had not initially volunteered (Tridimas 2020). Related to this, many Classical and Hellenistic states occasionally made formal appeals to their residents or citizens to come forth and donate money to the state. This procedure was called epidosis (Gabrielsen 2013, 337; Fawcett 2016, 156, 159; Gygax 2016, 19–20, 205–207). It was implemented widely in the Greek world to raise public funds. Bitros and Karayiannis (2010, 2011) mention that the state itself publicly rewarded those who accepted to undertake liturgies. Their names were inscribed on imposing columns throughout the polis and their prestige was increased in public life (Plut., Cimon, 10.5; Lyttkens 2013, 113). O’ Halloran (2018, 169) and Tridimas (2020), among others, add that for those harboring political ambitions, paying for a liturgy offered support in promoting their chances for election to public office. Davies (1981, 98–99) and Christ (2006, 156) argue that the democratic system of governance had cleverly benefited from the introduction of this institution by redirecting the traditional competition between aristocratic circles to donations motivated by increasing one’s prestige. Ultimately, the whole process worked in favor of the public interest, serving the needs of society. But accepting to perform a liturgy was not only related to motives that, perhaps, could be characterized as selfish. According to Kyriazis (2009, 113), this altruistic behavior was encouraged through education, “morals” and customs prevalent in Athens (and other Greek city-states). Athenian youths were actually taught fundamental altruistic values, such as devotion to the state, democracy, justice, liberty, etc. Choregia and trierarchy were the costliest of the liturgies. The annual minimum number of choregiai type of liturgies was 97, which means that they were assigned to an equal number of well-to-do Athenians. When the year coincided with the Great Panathenaic games, the number of choregiai increased to 118 (Davies 1981, 27). The choregos (sponsor) undertook the cost of staging a theatrical performance. He was responsible for setting up, training, paying and providing the costumes for the 15 members of the dance in a tragedy, the 24 members in a comedy, the 50 members in a dithyramb dance or for a group of fire dancers. The choregiai were part of important festivals such as the Great and Small Panathenaic games, the Eleusinian Mysteries, the Dionysia, the Thargilia, etc. There was no general rule or ceiling to the cost of a choregia, but what is certain is that choregoi had to spend substantially to achieve a successful choregia, especially when it came to the costumes; otherwise, the sponsor was stigmatized as pheidolos (stingy) (Christ 2006, 146). Certainly, a bad impression about the quality of a choregia could weigh heavily on any choregos who had political aspirations. Table 8.11 explains the liturgies and their purpose. Liturgies were practiced as an institution not only in Athens but also in other Greek city-states, such as Mytilene, Siphnos, Priene and Teos in Asia Minor (Gabrielsen 2013, 343).

266  The Athenian Public Sector and State Budget Table 8.11 The categories of liturgies Trierarchy Choregia Hestiasis Gymnasiarchy Architheoria Arrephoria Hippotrophia

A well-to-do Athenian paid for the maintenance of a navy-ready trireme. Undertaking the cost of staging a theatrical performance. Providing meals to citizens and receptions at festive events. Operating and maintaining a public fitness center (gymnasia). Expenses to cover the mission of consuls outside Athens at a series of events. Also maintaining embassies in pan-Hellenic games and festivals. Organizing processions carrying the veil of the goddess Athena. Raising horses either for the army or for important polis celebrations and races.

Sources: Xen. (Oec., 2.6), Andreades (1933, 291–292), Davies (1981), Gabrielsen (1994, 2013), Lyttkens (1994, 2010, 2013), Thorley (1996, 43), Ηansen (1991), Christ (2006), Kaiser (2007), Κyriazis (2009) and Tridimas (2020).

8.9.3 A Comment on the Fairness of the Athenian System of Taxation

In general, in a prosperous society, the tax system should be considered to have been socially just. By also taking into account the findings of Milanovic et al. (2011) and their inequality extraction ratio as a metric for inequality in premodern societies, Ober (2017, 137) argues that Athenian income inequality in 330 BCE was low by comparison to other documented historical preindustrial societies and is, in some respects, comparable to income inequality levels in some of today’s developed states. Taxes were divided between indirect taxes on exchange and direct taxes on wealth (Ober and Scheidel 2022, 416). For example, pentecoste was an indirect tax, while eisphora was a direct one. Taylor (2017) found that wealth between the eighth and fourth centuries BCE was growing and that there was a situation of relative equality in the distribution of income and wealth for a large part of the population, thus, agreeing with Ober’s (2017) observation that the Athenians, as a whole, lived above the subsistence level. In Attica in the late fourth century, the top 10% or so of citizens owned 30%–35% of all land. Remarkably, the next 70% of citizens owned 65%–70% of the land, and Ober (2010, 259, 2015a) concludes that inequality here was strikingly low in comparison to estimated distributions of land-holding in other ancient and medieval societies. Athenian wealth and income distribution were remarkably egalitarian, with about 40%–60% of the total Athenian population (including slaves) living at a decent “middling” level above subsistence (Ober 2010). Patriquin (2015), who has also focused on the issue, accepts this view. Taylor (2017) estimated that, in general, wealthy Athenians constituted an elite, comprising 4%–5% of male citizens and corresponding to 1% of the whole population. As a general image, the above evidence shows that there was a satisfactory degree of distribution of wealth among the Athenian citizens, and this conclusion does not justify the assessment of those who believe that there was a large gap between rich and poor. Christ (2006) agrees that, in general, the Athenian tax system should be characterized as fair. There was no social outcry regarding taxation, and the effects of tax fraud were not the rule but the exception.

The Athenian Public Sector and State Budget  267 Related to this is the issue of whether taxpayers had a propensity for evasion. As a general rule, the level of tax evasion is strongly related to the detection probability and the level of punishment provided by law, as Allingham and Sandmo (1972) argued in their influential paper regarding modern economies. This rule probably applied also in the case of Classical Athens. Tax evasion is also related to the fairness of a taxation system as well as to the fiscal conscience of the citizens themselves. Related to the first, Levi (1988) in her influential work, argues that for a tax system to be efficient it requires three basic prerequisites: i) taxpayers pay taxes only when they are sure that all other taxpayers pay as well, ii) when it is certain that this income is used in an objectively beneficial way for society and the state and iii) if the above two do not occur, tax evasion is observed. Having in mind the above views of Christ (2006) and Ober (2017), it seems that, more or less, the Athenian tax system fell within those three basic conditions as defined by Levi (1988). Related to the second, the Athenian citizens were generally honest in their tax obligations; any citizen found evading taxes was subject to euthyna, which resulted in very high fines, such as the confiscation of all property, such as ships (hence, high personal financial damage, as merchant ships were also related to high shipbuilding and maintenance costs), or even the very harsh punishment of atimia (Christ 2006, 199–202; Βitros and Karayiannis 2013, 12–14). The only legal means of avoiding liturgy was through the antidosis procedure (see, Section 3.4.3). Illegal means for concealment of income included hiding their assets in bank deposits and lockers or on estates belonging to them but located in different demes, rendering it difficult for the authorities to trace properties because each deme maintained its own registry. Another method of avoiding higher taxation was the fictitious transfer of property to relatives. Finally, there was also the simplest but probably most effective solution: burying one’s treasure, e.g., in his own courtyard (Cohen 1992, 191–203; Gabrielsen 1994, 53–60; Christ 2006, 191–194). As a general rule, Athenians’ willingness to accept their tax obligations has not been questioned, nor has the tax system been generally characterized as unjust and abusive. As a final comment, the view of authors such as Liddel (2009, 136), who argue that the Athenians did not think that economic redistribution was a prerequisite for political and socio-economic equality, should be rejected, as Patriquin (2015, 4) correctly argues. Redistribution was taking place due to the Athenian social welfare mechanisms that are described in detail in Chapter 10. Finally, the Athenians were also aware of another modern practice: that through taxation they could influence and redirect, at least to some extent, the production of goods and services in the economy. Athenaeus in Deipnosophistae (XII 521c2–d7) informs us that the people of the city-states of Sybaris decided that those who sold eels, those who worked with sea-purple dye and those who imported or caught them were not charged with taxes. Thus, tax exemption functioned (as it does today) as an incentive to develop specific markets for goods and services. And there is no doubt that similar practices were applied not only in Sybaris but also elsewhere, and I believe, almost certainly, in Classical Athens as well.

268  The Athenian Public Sector and State Budget Notes 1 For limitation purposes, I do not reproduce the public administration institutions that are analyzed in Sections 8.2–8.7 in the Glossary. 2 Tax-farming was probably first introduced in Classical Athens. The possibility that it was also introduced by other Greek cities of the time and later on should not be ruled out. It was certainly practiced during the Roman period. From the thirteenth century AD, it was adopted in France, the United Provinces, England and Spain. In India, it was applied from the thirteenth or fourteenth century until the 1800s; in the Ottoman Empire, in the late sixteenth or early seventeenth century, until 1925; in Russia, from the late fifteenth or the early sixteenth century, mainly for the collection of customs duties and taxes on salt and liqueur; and in the USA, in various forms, during the nineteenth and twentieth centuries, etc. 3 Here, I am talking about the good old days of Hollywood, which made films and “educated” citizens around the world with moral and universal principles, for example, films such as Twelve Angry Men (1957), Ben Hur (1959), The Sound of Music (1965), Romeo and Juliet (1968), etc. 4 See further in Section 8.8.1. 5 Regarding the Athenian state prison, the evidence is very scanty and scattered throughout various sources. Hunter (1997) collected all the relative evidence, and she deduced the following: it was located in the agora of Athens under the jurisdiction of the hendeka. Inmates included men who had been arrested for various reasons (such as murders, unpaid debts to the state) and were awaiting trial. Some others, already condemned to death, were waiting for their execution. Life inside the prison was harsh: inmates were forced to wear fetters and complained of physical hardship. It seems, however, that couches and baths were provided, as well as an opportunity to leave the prison for at least one major festival. Seeing visitors was also permitted. 6 https://ec​.europa​.eu​/eurostat​/statistics​-explained​/index​.php​?title​=File​:General​_government​_debt,​_2021​_and​_2022_(General_government_consolidated_gross_debt,_%25_ of_GDP)​_Apr2023​.png https://www​.investopedia​.com​/terms​/s​/stability​-growth​-pact​.asp 7 https://www​.statista​.com​/statistics​/269960​/national​-debt​-in​-the​-us​-in​-relation​-to​-gross​ -domestic​-product​-gdp/ 8 There is a vigorous debate among historians regarding the exact time of the introduction of the eisphora. But due to space limitations, I cannot provide a literature review here regarding this.

Ancient Greek authors (Perseus Digital Library) Aeschines, Against Ctesiphon Andocides, On the Mysteries Aristotle, Athenian Constitution Aristotle, Oeconomica Aristotle, Politics Athenaeus, Deipnosophistae Demosthenes, Against Aristogiton 1 Demosthenes, Against Macartatus Demosthenes, Against Meidias Demosthenes, Against Neaera Demosthenes, Against Theocrines Demosthenes, Against Timocrates Lysias, Against Nicomachus

The Athenian Public Sector and State Budget  269 Lysias, Apology for Mantitheus Plutarch, Aristides Plutarch, Moralia Plutarch, Pericles Pseudo-Xenophon, Constitution of the Athenians Thucydides, Histories (The Peloponnesian War) Xenophon, Memorabilia Xenophon, Oeconomicus

Modern authors Allingham, M. G., Sandmo, A., (1972), ‘Income tax evasion: A theoretical analysis,’ Journal of Public Economics, 1(3–4), 323–338. Amemiya, T., (2007), Economy and Economics in Ancient Greece, London, New York: Routledge. Αndreades, A. M., (1933), A History of Greek Public Finance, Cambridge, MA: Harvard University Press. Bitros, G. C., Karayiannis, A., (2010), ‘Morality, institutions and the wealth of nations: Some lessons from ancient Greece,’ European Journal of Political Economy, 26, 68–81. Bitros, G. C., Karayiannis, A., (2011), ‘Character, knowledge and skills in ancient Greek paideia: Some lessons for today’s policy makers,’ Journal of Economic Asymmetries, 8, 195–221. Bitros, G. C., Karayiannis, A., (2013), Creative Crisis in Democracy and Economy, Berlin, Heidelberg: Springer-Verlag. Bitros, G. C., Economou, E. M. L., Kyriazis, N. C., (2020), Democracy and Money: Lessons for Today from Athens in Classical Times, London, New York: Routledge. Blok, J., (2017), Citizenship in Classical Athens, Cambridge: Cambridge University Press. Bresson, A., (2016), The Making of the Ancient Greek Economy: Institutions, Markets, and Growth in the City-States, Princeton, NJ: Princeton University Press. Canevaro, M., (2018), ‘What was the law of Leptines’ really about? Reflections on Athenian public economy and legislation in the fourth century BCE,’ Constitutional Political Economy, 29, 440–464. Christ, R. M., (2006), The Bad Citizen in Classical Athens, Cambridge: Cambridge University Press. Cohen, E. E., (1992), Athenian Economy and Society: A Banking Perspective, Princeton, NJ: Princeton University Press. Costouros, G. J., (1978), ‘Auditing in the Athenian state of golden age (500-300 B.C.),’ The Accounting Historians Journal, 5(1), 41–50. Cronin, T. E., (1999), The Politics of Initiative, Referendum, and Recall, Cambridge, MA: Harvard University Press. Davies, J. K., (1981), Wealth and the Power of Wealth in Classical Athens, New York: Amo Press. Davies, J. K., (1994), ‘Accounts and accountability in Classical Athens,’ in R. Osborne, S. Hornblower (Eds.), Ritual, Finance, Politics: Athenian Democratic Ac-counts Presented to David Lewis, New York: Oxford University Press, 201–212. Economou, E. M. L., (2023), ‘Applying a ‘turn to the sea’ strategy and the transformation of the Athenian economy (508–322 BCE),’ Munich Social Science Review, 6, 95–119. Economou, E. Μ. L., Kyriazis, N. C., (2016), ‘Choosing peace against war strategy. A history from the ancient Athenian Democracy,’ Peace Economics, Peace Science and Public Policy, 22(2), 191–212.

270  The Athenian Public Sector and State Budget Fawcett, P., (2016), ‘When I squeeze you with eisphorai: Taxes and tax policy in Classical Athens,’ Hesperia: The Journal of the American School of Classical Studies at Athens, 85(1), 153–199. Figueira, T. J., (1998), The Power of Money: Coinage and Politics in the Athenian Empire, Philadelphia, PA: University of Pennsylvania Press. Fröhlich, P., (2013), ‘Governmental checks and balances,’ in H. Beck (Ed.), A Companion to Ancient Greek Government, Malden, MA: Willey-Blackwell, 252–266. Gabrielsen, V., (1994), Financing the Athenian Fleet: Public Taxation and Social Relations, Baltimore, MD: John Hopkins University Press. Gabrielsen, V., (2013), ‘Finance and taxes,’ in H. Beck (Ed.), A Companion to Ancient Greek Government, Malden, MA: Willey-Blackwell, 332–348. Günther, J., Hahn, F., (2019), ‘Choregia and trierarchy as profit-oriented entrepreneurships,’ Constitutional Political Economy, 30, 177–193. Gygax, M. D., (2016), Benefaction and Rewards in the Ancient Greek City. The Origins of Euergetism, Cambridge: Cambridge University Press. Hansen, M. H., (1979), ‘Misthos for magistrates in Classical Athens,’ Symbolae Osloensis, 54, 5–22. Hansen, M. H., (1980), ‘Seven hundred Archai in Classical Athens,’GRBS, 21, 151–173. Hansen, M. H., (1991), The Athenian Democracy in the Age of Demosthenes, London: Bristol Classical Press. Harris, E. M., (2013), The Rule of Law in Action in Democratic Athens, Oxford: Oxford University Press. Harris, E. M., (2016), ‘The legal foundations of economic growth in ancient Greece: The role of property records,’ in E. M. Harris, D. M. Lewis, M. Woolmer (Eds.), The Ancient Greek Economy: Markets, Households and City States, New York: Cambridge University Press, 116–147. Harris, E. M., Lewis, D. M., (2016), ‘Introduction: Markets in classical and Hellenistic Greece,’ in E. M. Harris, D. M. Lewis, M. Woolmer (Eds.), The Ancient Greek Economy: Markets, Households and City States, New York: Cambridge University Press, 1–37. Hunter, V., (1997), ‘The prison of Athens: A comparative perspective,’ Phoenix, 51(3/4), 296–326. Jew, D., (2022), ‘The non-agricultural economy: Artisans, traders,’ in S. von Reden (Ed.), The Cambridge Companion to Ancient Greek Economy, Cambridge: Cambridge University Press, 202–220. Kaiser, B. A., (2007), ‘The Athenian trierarchy: Mechanism design for the private provision of public goods,’ The Journal of Economic History, 67(2), 445–475. Kyriazis, N. C., (2009), ‘Financing the Athenian state: Public choice in the age of Demosthenes,’ European Journal of Law and Economics, 27(2), 109–127. Kyriazis, N. C., Economou, E. M. L., (2015), ‘Democracy and education: A history from ancient Athens,’ in J. Backhaus (Ed.), The University According to Humboldt. History, Policy, and Future Possibilities, Heidelberg: Springer Verlag, 75–84. Kyriazis, N. C., Economou, E. M. L., (2016), ‘The memoranda trap and the near fall of Greece,’ in D. Caldwell (Ed.), Greece: Economic Crises and Management, New York: Nova Publishers, 75–93. Langdon, M., (1994), ‘Public auctions in ancient Athens,’ in R. Osborne, S. Hornblower (Eds.), Ritual, Finance, Politics. Athenian Democratic Accounts Presented to David Lewis, Oxford: Clarendon Press, 253–268. Lanni, A. M., (2016), Law and Order in Ancient Athens, Cambridge: Cambridge University Press.

The Athenian Public Sector and State Budget  271 Levi, M., (1988), Of Rule and Revenue, Berkeley, Los Angeles, CA: University of California Press. Lewis, D. M., (1997), Selected Papers in Greek and Near Eastern History, Cambridge: Cambridge University Press. Lewis, D. M., (2018), Greek Slave Systems in their Eastern Mediterranean Context, c.800146 BC, Oxford: Oxford University Press. Liddel, P., (2009), ‘Democracy ancient and modern,’ in R. K. Balot (Ed.), A Companion to Greek and Roman Political Thought, Malden, MA: Blackwell, 133–148. Loomis, W. T., (1998), Wages, Welfare Costs and Inflation in Classical Athens, Michigan: Michigan University Press. Lyttkens, C. H., (1994), ‘A predatory democracy: An essay on taxation in classical Athens,’ Explorations in Economic History, 31, 62–90. Lyttkens, C. H., (2010), ‘Institutions, taxation, and market relationships in ancient Athens,’ Journal of Institutional Economics, 6(4), 505–527. Lyttkens, C. H., (2013), Economic Analysis of Institutional Change in Ancient Greece. Politics, Taxation and Rational Behaviour, London, New York: Routledge. MacDowell, D. M., (1978), The Law in Classical Athens, Ithaca, NY: Cornell University Press. Matsusaka, G. J., (2005a), ‘Direct democracy works,’ The Journal of Economic Perspectives, 19(2), 185–206. Matsusaka, G. J., (2005), ‘The eclipse of legislatures: Direct democracy in the 21st century,’ Public Choice, 124, 157–177. Mattingly, H. B., (1968), ‘Athenian finance in the Peloponnesian War,’ Bulletin de Correspondance Hellénique, 92(2), 450–485. Mauro, P., (1995), ‘Corruption and growth,’ The Quarterly Journal of Economics, 110(3), 681–712. McAuley, A., (2013), ‘Officials and office-holding,’ in H. Beck (Ed.), A Companion to Ancient Greek Government, Malden, MA: Willey-Blackwell, 174–190. McHugh, M., (2019), ‘Going the extra mile: Travel, time and distance in Classical Attica,’ The Annual of the British School at Athens, 114, 1–34. Migeotte, L., (2009), The Economy of the Greek Cities. From the Archaic Period to the Early Roman Empire, Berkeley, Los Angeles, London: University of California Press. Milanovic, B., Lindert, P. H., Williamson, J. G., (2011), ‘Pre-industrial inequality,’ The Economic Journal, 121, 255–272. Mill, J. S., ([1859], 1998), On Libery, Pennsylvania: The Pennsylvania State University (Electronic Classics Series). North, D. C., (1990), Institutions, Institutional Change and Economic Performance, Cambridge: Cambridge University Press. Ober, J., (2008), Democracy and Knowledge. Innovation and Learning in Classical Athens, Princeton: Princeton University Press. Ober, J., (2010), ‘Wealthy Hellas,’ Transactions of the American Philological Association, 140, 241–286. Ober, J., (2015a), The Rise and the Fall of Classical Greece, Princeton: Princeton University Press. Ober, J., (2015b), ‘Classical Athens,’ in A. Monson, W. Scheidel (Eds.), Fiscal Regimes and the Political Economy of Premodern States, Cambridge: Cambridge University Press, 492–592. Ober, J., (2017), ‘Inequality in late-lassical democratic Athens. Evidence and models,’ in G. C. Bitros, N. C. Kyriazis (Eds.), Democracy and Open Economy World Order, Heidelberg: Springer-Verlag, 125–146.

272  The Athenian Public Sector and State Budget Ober, J., Scheidel, W., (2022), ‘Inequality,’ in S. von Reden (Ed.), The Cambridge Companion to Ancient Greek Economy, Cambridge: Cambridge University Press, 404–420. O’ Halloran, B., (2018), The Political Economy of Classical Athens: A Naval Perspective, Leiden: Brill. Papazarkadas, N., (2011), Sacred and Public Land in Ancient Athens, New York: Oxford University Press, Inc. Patriquin, L., (2015), Economic Equality and Direct Democracy in Ancient Athens, Basingstoke, Hampshire: Palgrave MacMillan. Pritchard, D. M., (2012), ‘Costing festivals and war: Spending priorities of the Athenian democracy,’ Historia, 61(1), 18–65. Pritchard, D. M., (2014), ‘The public payment of magistrates in fourth-century Athens,’ GRBS, 54, 1–16. Pritchard, D. M., (2015), Public Spending and Democracy in Classical Athens, Austin: University of Texas Press. Rhodes, P. J., (1972), The Athenian Boule, Oxford: Oxford University Press. Rhodes, P. J., (1991), ‘The Athenian code of laws, 410–399 BC,’ JHS, 111, 87–100. Rhodes, P. J., (2013), ‘The organization of Athenian public finance,’ Greece and Rome, 60, 203–231. Schwartzberg, M., (2004), ‘Athenian democracy and legal change,’ American Political Sciense Review, 98(2), 311–325. Serrati, J., (2013), ‘Government and warfare,’ in H. Beck (Ed.), A Companion to Ancient Greek Government, Malden, MA: Willey-Blackwell, 332–348. Stroud, R. S., (1974), ‘An Athenian law on silver coinage,’ Hesperia, XLIII(2), 157–188. Taylor, C., (2017), Poverty, Wealth, and Well-being: Experiencing Penia in Democratic Athens, Oxford: Oxford University Press. Thorley, J., (1996), Athenian Democracy, London, New York: Routledge. Tridimas, G., (2011), ‘A political economy of direct democracy in ancient Greece,’ Constitutional Political Economy, 22, 58–82. Tridimas, G., (2020), ‘Modelling the quest for status in Ancient Greece: Paying for liturgies,’ Homo Oeconomicus, 37, 213–236. Van Alfen, P. G., (2011), ‘Hatching owls: Athenian public finance and the regulation of coin production,’ in F. de Callatay (ed.), Quantifying Monetary Supplies in Greco-Roman Times, Bari: Edipuglia, 127–149. Van Wees, H., (2013), Ships and Silver, Taxes and Tribute. A Fiscal History of Archaic Athens, London, New York: I.B. Tauris. von Reden, S., (2010), Money in Classical Antiquity, Cambridge: Cambridge University Press.

9

Economic Growth Policies in Classical Athens

9.1 Estimating the Athenian GDP and GDP Growth Economic growth for a state is achieved when the diffusion of income and wealth produced in the economy is not limited to a few established privileged groups and economic oligarchies but is distributed throughout society, with a relatively fair (but not uniform) way, resulting in an increase in the general level of prosperity. The dispersion of wealth (and inequality) in a modern economy can be measured through the well-known Gini coefficient and Lorenz curve techniques. In their important contributions, Alesina and Rodrik (1994), Alesina and Perotti (1996), Perotti (1996) and Acemoglu and Robinson (2013)1 argued that in modern economies, inequality may impair growth by hampering physical and human capital accumulation, property rights protection and socio-political instability. I believe that this is an intertemporal axiom that also applies in the case of Classical Athens. A long list of authors confirms that economic growth did take place for at least some time, both in Classical Athens and Ancient Greece in general, as well as in Ancient Rome (see Table 2.1; North 1981, Chapter 9; Scheidel et al. 2008; Temin 2013). Taylor (2017) argues that wealth between the eighth and forth centuries was growing and Athenians, as a whole, lived above subsistence level. Ober (2010, 2011, 2015a, 3–4) argues for a period of extensive economic growth in Ancient Greece. The per capita growth rate from 800 to 300 BCE was perhaps 0.15% per annum, with an aggregate annual growth rate for mainland Greece of somewhere around 0.6%–0.9% (Ober and Scheidel 2022, 405). Characteristically, North (1981) writes that if an ancient Greek citizen were to have been magically transported through time to the England of 1750 AD, he would have found many familiar things and that only if he had been transported to a time, say, two centuries later, around 1950, would he no longer recognize the earth as a familiar place. North is saying that until the 1760s – that is, before the First Industrial Revolution – the standard of living and the means of production, as well as the level of wealth, were not much higher than what the ancient Greeks had enjoyed. Progress in all areas of Greek and Roman antiquity was generally suspended during the European Middle Ages (with some exceptions such as the Byzantine Empire, Venice, Genoa Augsburg, the Hanseatic League and the Old Swiss Confederacy) and then, gradually, with the European Renaissance, evolution was rekindled to reach the commercial capitalism of the sixteenth century AD. DOI:  10.4324/9781003434146-9

274  Economic Growth Policies in Classical Athens It is important to add here that there is evidence regarding the overall value of the property of Athenians, known as timema, available at 378/377 BCE – that is, the year in which Nausinicus was an eponymous archon, and which, according to Polybius (Histories, 2.62.6–7), was equal to 5,750T (Andreades 1933, 334–335). This is, of course, a considerable sum, equal to 34,500,000 drachmae. Bergh and Lyttkens (2011) estimate the annual Athenian gross domestic product (GDP)2 during the fourth century BCE to have amounted to 7,545T or 9,200T. In particular, based on Hansen’s (1991, 92–94) population figures, they accepted that the Athenian polis was comprised of 30,000 free adult male citizens, 30,000 female citizens, 40,000 metics (half of them female) and (at least) 100,000 slaves. Based on Loomis (1998), they then accepted that each worker, either citizen, metic or slave, received 1 drachma as a daily wage. They further assume that from the pool of 20,000 metic women, 5,000 were also actively working in the market and not at home as housewives receiving no income. Based again on Hansen (1991, 93), they further assumed a lower limit for the number of slaves – c. 100,000 – and they use 150,000 as a baseline estimate and 200,000 as an upper limit. They further assumed that one-third of the slaves were doing household work and, therefore, do not count in GDP. Thus, the total number of slaves which contributed to the GDP derives from the following equation:

150,000 × 2/3 = 100,000

(9.1)

Based, again, on Hansen (1991, 186), they further calculated that working days for either citizens or metics numbered 195 in total annually and that slaves worked 300 days. Thus, Bergh and Lyttkens (2011) reached the following calculation:

[(30,000 + 20,000 + 5000) × 195) + (100,000 × 300)] = 6,787T

(9.2)

They then added a “rate of return” from liturgies of 758T, thus, the sum of

6,787 + 758 = 7,545T is an approximation of the Athenian annual GDP. (9.3)

This numerical outcome could have been higher if the number of slaves is considered to have been as many as 200,000 instead of 150,000. In any case, even if this calculation may be considered a simplistic approximation, it is more important to consider that 7,545T is undeniably a very large amount of value, and it shows the great dynamics of the Athenian economy in terms of GDP and wealth. Ober (2010, 16, 27) provided a different approach by dividing the Athenian population into three income groups: low, medium and high, estimating a GDP figure of between 5,590T–6,660T. The numerical outcome of Equation (9.3) could have been even higher if one accepts the following thoughts: first, Acton (2014, 257) accepts Hansen’s (1991, 186) estimation with a slight variation when he writes that Athenian citizens employed in public works seem to have had a working year of no more than 200 days, with much of the rest being devoted to at least 60 public holidays, attending festivals and performing various other civic duties, including participating in legal

Economic Growth Policies in Classical Athens  275 proceedings. However, this figure did not apply to those working in the private sector. Acton (p. 257) adds that few free craftsmen appear to have worked full-time (360 days). And Amemiya (2007, 111) adds that the consensus of the ancient historians concerning the number of working days in Classical Athens is in the range of 200–250. For reasons of ease, I accept 220 days a year regarding this. Second, Acton (p. 257) provides evidence that slaves worked all days of the year. Third, in Section 5.10, I provided evidence that a portion of women worked in the agora. Although there is no tangible numerical evidence, I assume that onefifth (4,000) of the total female population must have worked in the market. Taking the above into account, Equation (9.3) is readjusted as follows:

[(30,000 +20,000 + 5000 + (4000)) x 220) + (100,000 x 360) + 758T] = 8921,33T ~ 8921T

(9.4)

The above evidence, as a whole, leaves no room for questioning the success of the Athenian economy in achieving remarkable economic growth and in expanding the wealth of its citizens, albeit, for the most part, the affluent ones. 9.2 Six Important Elements for Economic Growth in Classical Athens This section focuses on several parameters of economic growth in Classical Athens: i) infrastructure development through large-scale public works, ii) population growth, iii) life expectancy, iv) better housing conditions, v) urbanization and vi) technological innovations. 9.2.1 Large-scale Public works: The Fiscal Expansionary Programs of Pericles, Eubulus and Lycurgus

This section briefly refers to the large-scale fiscal expansionary programs of three prominent Athenian politicians – Pericles, Eubulus and Lycurgus – thanks to whom Athens experienced prosperity and economic growth. Starting with Pericles, after his political reforms in favor of the Athenian demos, he committed to the completion of his grand strategy: to make Athens the most powerful state in the eastern Mediterranean, combined with great architectural and cultural programs. The first plan led to the escalation in the rivalry between Athens and Sparta, which culminated in what proved to be catastrophic for Hellenism – the Peloponnesian War (Gilpin 1988). Pericles, in addition to the annual public revenues of the polis, which amounted to about 400T, accessed the revenues of the Allied Fund (AF) that amounted to 9,700T by the start of the Peloponnesian War. Annual polis revenues in 431 were 1000T, 600T from overseas and 400T from internal income. In fact, at the start of this war, Athens demanded a dramatic increase in financial assistance from its allies, with the result that the total annual revenues available to the Athenian state rose (at least on one occasion) to the very large sum of 1,400T. Once the Athenian naval domination and supremacy in the Aegean was secured, Pericles focused on the second part of his program, the promotion of Athenian

276  Economic Growth Policies in Classical Athens greatness not only through military power but through culture as well. Beginning in 447 BCE and ending in 432, he focused on the reconstruction of the Acropolis of Athens, perhaps the most ambitious building project of Classical antiquity related to culture. Apart from the aspect of culture and art, the construction of this and other public works was also very important from an economic standpoint, as it enabled the employment of the numerous thetes who, in peacetime, no longer found employment in the navy. Consequently, Pericles succeeded in reorienting a large part of the city’s workforce to public works instead of war (Andreades 1933, 202). The Parthenon required an estimated 100,000 tons of stone (Acton 2014, 205– 206). Modern research estimates the final cost of the Parthenon temple to have been about 470T (Samons 1993, 137; Migeotte 2009, 108). Andreades (1933, 237), having in mind the words of Pseudo-Xenophon, (Con., 2.9) adds that: It was a matter of national pride for the Athenians, as it was later for the citizens of Florence or Venice, Nuremberg, and Bruges, that their city should be “beautiful and great.” The huge costs of the project provoked reactions from the other member-states of the Alliance. This is, however, a disputed issue in the bibliography (KalletMarx 1989). Andreades (1933, 234) further cites the earlier works of authors who provided estimations accorded to the following public works: the Parthenon cost 700T; the Chryselephantine statue of Athena cost 1000T; the Propylaea cost 400T; the Odeium, the docks and the middle Long Walls and other works in Piraeus cost 3,000T; two gold Victories cost 200T; and various other temples and monuments, including the temple of Nike Apteros cost 2,700T. These add up to 8,000T, a very large sum, which Andreades and other authors believe to be an exaggeration. Lyttkens and Gerding (2018) explain the political activities of Pericles through Behavioral Economics. Pericles launched major public works with the view of increasing his popularity and political prestige. According to this interpretation, the introduction of a salary for the judges was established to strengthen his popularity (Arist., Ath. Const., 27.2–4). The recall of Cimon from the ten-year exile (Plut., Per., 10.1–4) was made because Pericles considered Cimon’s military skills necessary for his own political survival, while Pericles promoted the Law on Citizenship (according to which citizens of the Athenian state were considered only those whose parents were both native Athenians) to exclude Cimon’s children from politics because his wife was Greek but not an Athenian (Arist., Ath. Const., 27.1; Plut., Per., 37.2–5). Lyttkens and Gerding (2018) add that the beautification works and the promotion of the polis’s greatness increased Pericles’s prestige because these projects employed more than 1,000 low-income citizens during the period 450–425 BCE. It is reasonable to assume, as Lyttkens and Gerding suggest, that Pericles’s public works policy translated into political support from the low-income workers. Having this in mind, many claim that Pericles, by manipulating the city-state’s institutions, had become something of a de facto unofficial governor of Athens or at least someone with outsized influence in the political sphere. However, it would

Economic Growth Policies in Classical Athens  277 be wrong to claim that Pericles acted without the consent of a large part of the Athenian demos. Pericles exerted such great influence simply because he had the gift of understanding, at that moment, what the people wanted and needed. In accordance with Pericles, Eubulus and Lycurgus, during the second half of the fourth century BCE, used their posts to implement a series of fiscal expansionary programs through extensive public works of “Keynsianist inspiration,” under a modern interpretation, for the second time after the reforms of Pericles. Canevaro (2018) comments on the influence that Xenophon’s economic ideas had on Eubulus and Lycurgus. According to Diogenes Laertius (Lives of Eminent Philosophers, 2.59), Eubulus sponsored Xenophon’s recall from exile.3 In particular, because of the so-called Social War of 357–355 BCE, Athens endured a serious economic recession. The war eroded the economic dynamics of both the peasantry and the merchant class, exhausting wealthy Athenians through excessive eisphorai taxation and liturgies. Public revenues fell to 130T a year, a very low sum, mainly due to disruption in trade because of the war. The catastrophic effects of that war rendered Athens almost bankrupt. A high percentage of metics abandoned the city; even the silver mines of Laurion functioned at a reduced level (Andreades 1933; Κroll 2011, 237). Despite the significant economic downturn, the majority of low-income thetes continued to favor preserving the war status because naval service provided them with a secure job. However, the middle class, the hoplite citizens, as well as the wealthier Athenians, were negatively affected. The middle class suffered because, apart from the palpable risk of being wounded or dying in battle, the war meant a prolonged absence from farms and/or commercial activities. The collapse of trade was a severe blow to the wealthy, as was the burden of expensive liturgies to finance the hostilities, such as trierarchy. Eubulus, an orator, politician and the treasurer manager of the Theorikon, resolved this explosive situation by orchestrating, as had Solon and Pericles before him, a “compromise” between the different social groups through a common agreement, a kind of a “social contract,” abandoning the war and adopting a pacifist policy aimed at the internal reorganization of the state by introducing a number of extensive public works. The thetes could now find steady work, as was the case with the triremes. Eubulus’s political gamble was aimed at retrieving the power of Athens based on the city’s intrinsic strengths (Εconomou and Kyriazis 2016). The public works that took place included building a road network, a water supply system, as well as the construction of shipyards and waterfronts for mooring ships. It was also decided to transfer three-quarters of the fleet of the Athenian navy to the two new ports, Zea and Mounichia, so that the central port of Piraeus could be used exclusively for commercial purposes (Burke 2010, 409–410). Eubulus’s strategy can be explained through the prism of the modern defense economics literature on the opportunity cost of war that constricts prosperity, putting an end to the benefits of prewar trade. In this regard, the choice of peace or war strategy lies in the economic evaluation of the opportunity cost of peace or war; the Athenians eventually chose the strategy of peace over war because the long-term benefits of financing public works were considered (and proven a posteriori) to be higher than the opportunity cost of war (Εconomou and Kyriazis 2016).

278  Economic Growth Policies in Classical Athens Eubulus’s program was halted for a while when the pro-war ideas of Demosthenes toward Macedonia prevailed. However, Athenian efforts to limit the spread of Macedonian power were completely thwarted after the decisive defeat of an allied army of the city-states of southern Greece at the Battle of Chaeronea in 338 BCE. The belligerent policy was again abandoned in favor of peace and a great new politician, Lycurgus, a former collaborator of Eubulus’s (who probably died in 340), took office as epimeletes tes koines prosodou. Lycurgus inaugurated an extensive public works program similar to that of his predecessor. This new program, approved by the Assembly, lasted until 322 BCE, the year of the Athenian fleet’s defeat by the Macedonians at the naval battles of Echinadai and Amorgos. Lycurgus died in 323, the same year as Alexander the Great. However, his public works program proved successful, contributing to the continuation of the Athenian economy’s impressive rise, originally begun in 355 by Eubulus. Lycurgus’s program included extensive public works, such as a new sewer system in Piraeus and building prominent monuments, such as placing marble in the Dionysus theater under the Acropolis and the expansion of the meeting place on the Pnyx. Also, among other things, a famous public hourglass was built, the Telestion in Eleusis, one of the most important centers of worship in the ancient world, and several theaters in various municipalities. A new Panathenaic stadium was built for a variety of sports activities, and the road network to Eleusis and Oropos was improved. The agora in the city’s center was embellished with new temples and other buildings. New court buildings were added to those already existing. Regarding military infrastructure, care was taken to build adequate sheds for the triremes. The naval base was expanded, and Philon’s Arsenal was built in Piraeus. As Athens had not been defeated at sea (yet) but only on land, the triremes were, in fact, still the Athenian state’s only factor of military added value on the geopolitical chessboard of the time. Special care was taken to maintain this crucial geopolitical equalizer. The city walls were strengthened, and a moat dug at the foot. Also, the institution of ephebeia was introduced to ensure the military training of young Athenians (Ober 2008; Kyriazis 2009; Burke 2010, 407, 413). To ensure the smooth conduct of trade, it was necessary to implement an “open and safe seas” policy to combat piracy, which was so harmful to international commerce. To this end, the construction of a naval base in the Adriatic was envisaged (Ober 2008, 68–69). These extensive infrastructure projects of Keynesian inspiration offered guaranteed work to a large number of low-income citizens. Also, through enktesis, special privileges were granted to foreigners engaged in long-term commercial activities which proved to the benefit of the collective prosperity of the citizens of Athens. The general conclusion that emerges from the implementation of these expansionary fiscal policy programs of Pericles, Eubulus and Lycurgus is that their success was primarily due to the consent of at least the majority of the Athenian demos. Eubulus’s and Lycurgus’s programs contributed to a spectacular economic recovery which translated into a jump in public revenues from 130T in 355 BCE to (at least) 1,200T in 322, and there is no doubt that this outcome was also associated with economic growth. It may even be a lasting historical record. Is there any

Economic Growth Policies in Classical Athens  279 other economy in history that has managed to increase the state’s public revenue by 850% in just 33 years? Andreades (1933, 373, 377) and van Wees (2013, 1) argue that Lycurgus is said to have spent 18,650T over 12 years (336–324 BCE), adding that no modern European state has exceeded Athens’ financial performance before Great Britain made a quantum leap to another level during the Industrial Revolution. Bitros et al. (2020) argue that Eubulus’s and Lycurgus’s public works programs can be seen as a second golden age of Classical Athens. These trade-off policies between public works instead of new war expenses, which reoriented the priorities of the Athenian economy and led to impressive economic growth, could be seen as an “Athenian New Deal,” almost 2,300 years before the famous “deal” between the American citizens and then-President Franklin D. Roosevelt, who introduced a series of public work projects through financial and regulatory reforms between 1933 and 1939, with the view of combatting the deleterious side effects of the global financial crash of 1929. Furthermore, it is also important to acknowledge that between the two periods, there was a qualitative change in the very nature of public works. While in the time of Pericles, the most important feature of these major public works was the construction of additional religious infrastructure, in the time of Eubulus and Lycurgus, this changed, and emphasis was given to infrastructure projects to further develop the city’s economy. Figure 9.1 explains an extra reason why the fiscal expansionary programs of Pericles, Eubulus and Lycurgus must have been beneficial for the Athenians, especially in terms of what today is characterized as Average Cost (AC) reduction. The

C2

C1

LACL LACK

Co 0

Q M1

QM2

QM3

Figure 9.1  Long average cost reduction through a massive production strategy.

280  Economic Growth Policies in Classical Athens basic premise of AC is that large-scale production of public works involves the largescale acquisition of primary materials for construction, as opposed to piecemeal small construction projects scattered in different demes, which would have made the whole public works projects more burdensome to the state budget as a whole. In other words, if public works were made piecemeal (e.g., a new temple of Artemis in a deme within the district of the Kekropis tribe, the cost would be higher in comparison to performing these projects as a part of a wider and unified large-scale building strategy. In particular, out of the ten tribes that comprised the Athenian city-state, I focus on two cases, Kekropis and Leontis regarding the cost of purchasing marble. If each of them had to undertake part in a major project on its own, each deme would have paid more dearly for its marble, thus inflating average costs. In the long run, the average cost to Leontis would have been LACL and to Kekropis, LACK. Figure 9.1 shows that, in a case in which all the demes of Leontis ordered a quantity of marble as large as QM2, the cost would be C1. Similarly, if Kekropis’s demes wished to produce QM1, the cost would be C2. However, if both tribes and demes bought marble together from a single supplier as a single order, the outcome of production would have been: QM1 + QM2 = QM3

(9.5)

which means that the average production cost to both tribes would be reduced to C0. The final cost to Leontis would have been C1 – C0 and to Kekropis, C2 – C0. Figure 9.1 argues that unified acquisition of primary construction materials would result in the combined public works project being less costly, due to achieving what today is characterized as economies of scale. As a final comment, on December 31, 1933, J.M. Keynes wrote an open letter to the US president Franklin D. Roosevelt commenting on the his economic recovery program. Keynes, among others, proposed the replacement of war/military expenses with public infrastructure as a way to exit the side effects of the 1929 severe economic crisis. He argued that: That is why a war has always caused intense industrial activity. In the past orthodox finance has regarded a war as the only legitimate excuse for creating employment by governmental expenditure. You, Mr President, having cast off such fetters, are free to engage in the interests of peace and prosperity the technique which hitherto has only been allowed to serve the purposes of war and destruction.4 Almost 2,300 years before Keynes and Roosevelt, the Athenians had introduced what Keynes proposed, achieving continuous economic growth for almost 30 years between the 350s and 320s BCE in combination with an unprecedented peaceful period between 338 to 323 BCE in which Athens restored its strength and honor and renewed all those characteristics that had, in the past, made the Athenian polis great, renowned and admired well beyond its borders.

Economic Growth Policies in Classical Athens  281 9.2.2 Population Growth

The impressive economic growth of the Athenian state and the Greek world in general from the Archaic to the Hellenistic period is also reflected in the trend in population growth and the rise of the agricultural sector (Ober 2008, 2011, 2015a, b; Izdebski et al. 2020). An expanding population generally certifies better living conditions combined with higher economic performance, a general principle that applies, over time, to all societies and cultures. Starting with fewer than 1 million people shortly after the collapse of the Mycenaean world, the Greek population gradually rose to more than 8 million souls, and from 700 to 250 BCE, the population growth trend was higher compared to the period 1000–700 BCE. Hansen (1991, 53) estimates the number of citizens for the whole of Attica as 60,000 during the fifth century BCE and 30,000 for the fourth century. McAuley (2013, 188) gives a number of about 40,000 citizens before the Peloponnesian War while agreeing to 30,000 citizens in the fourth century. Bresson (2007, 95) gives a population greater than 40,000 for the fifth century while accepting 30,000 for the fourth. All these researchers confirm the view that the decline of the population is due to the extinction of a significant part of the population because of the plagues of the 430–429 and 427–426 periods, as well as wartime losses in the Sicily Campaign, the naval Battle of Arginusae and the defeat at Aegospotamoi during the Peloponnesian War. Finley (1973) argues that just before the Peloponnesian War, the population composition of the whole of Attica consisted of 305,000 inhabitants, of whom 160,000 were free citizens – 80,000 men and women and 80,000 children – 25,000 metics and 120,000 slaves. Thorley (1996, 74) offers a differentiated estimate for the fifth century: free male citizens, between 30,000 and 50,000 in a population of 250,000– 300,000 inhabitants, with 80,000–100,000 slaves and 25,000 metics. Akrigg (2019, 75) estimates a range between 50,000–55,000 citizens for the fifth century. McHugh (2019, 3), based on Hansen (1991, 93–94), argues that the total population of Attica during the fourth century varied between 270,000 to 300,000 inhabitants. Bresson (2019, 142) estimates 250,000 inhabitants for the same period. Taylor (2017) argues that the demographic decline that occurred during the Peloponnesian War also led to a qualitative change in society, for example, in the ratios of men/ women, citizens/non-citizens, young/old, rich/poor. However, Amemiya (2007, 36) and Carugati et al. (2019) agree with Finley’s estimate. If Finley’s estimates are correct, then there were three slaves (both men and women) for every two male free citizens. Cohen (2002, 112, ftn. 55), based on Xenophon (W.M., 2.1–7) and Hansen (1991, 93–94), argues that the metic population was more variable in number than the citizen body. And because the population of free male citizens is estimated to have not exceeded 30,000 for the end of the fourth century, and the total population was around 300,000 souls, an approximate estimate of the number of women and children as well as the number of slaves is possible. For the fourth century, one can assume that due to losses in the Sicilian Campaign, the balance of male and female population was upset. It is worth noting

282  Economic Growth Policies in Classical Athens that, to deal with the reduction in the male population after the Sicilian catastrophe, and even though monogamy was the inviolable principle of marriage in the ancient Greek world, according to Pomeroy (1995, 66–67), polygamy was permitted for a short time to make up for the losses due to the Peloponnesian War and restore equilibrium to the male–female ratio. This is also another interesting example of how socially adaptable the mentality of the Athenians was – this time, as a way of dealing with another serious existential problem, the drop in the male population. And it is also very interesting that once the numerical relationship of men and women was restored, monogamy was restored as well. Therefore, given that the total population of Attica in the fourth century did not exceed 300,000, it can be assumed that: i) the number of metics amounted to approximately 25,000, but with an increasing trend (Cohen 2002) and ii) the number of slaves would have been about 150,000–155,000 and was higher than that of citizens. According to Rhodes (1992, 83), slaves numbered approximately 100,000 during the fifth century. Akrigg (2019, 91) has noted the view of the orator Hyperides, found in a fragment (fr. 29), who argued that after the crushing defeat at Chaeronea, Athens should be rearmed by conscripting the 150,000 or more slaves from the silver mines and the rest of the countryside to the land army. If this figure is true, indeed, it means that the number of slaves increased during the fourth century. Perhaps this increase in the number of slaves may also be seen as an indirect sign of economic growth in the sense that in the fourth century, both the Athenian state and the Athenian citizens were more affluent as a whole and could buy and use more slaves than during the fifth century. 9.2.3 Life Expectancy

Regarding the issue of life expectancy, Bresson (2007) considers that there is nothing to suggest that the average mortality in Ancient Greece was higher than the level observed in Early Modern (post-medieval) Europe. Unfortunately, there is a misconception that prevails that the life expectancy of the ancient Greeks was very low. However, evidence exists that many Greek philosophers lived to ages comparable to today, which suggests a high level of quality of life. And even if the contradiction could be that the surviving references regarding life expectancy mostly concern the upper intellectual elite of Athens, who enjoyed better living conditions than the average Athenian, this does not mean that the average Athenian’s life expectancy was much lower than that of the elite, as some researchers have erroneously argued. Even so, assuming that the average well-to-do Athenian lived to be about 75 years old, how many fewer years did a farmer or a thete live? Most likely, the difference would not have been very large. For example, Isocrates died at the age of 98 after committing suicide because he was suffering from an incurable disease. Gorgias died at the age of 107. Sophocles died at the age of 91 and Euripides died at the age of 74. Plato lived 80 years, Euripides lived 74 years and Socrates was 71 when he was executed. Aristophanes lived just 60 years, relatively few, compared to the others. Taylor (2017) argues that

Economic Growth Policies in Classical Athens  283 the standard of living of the population must have been quite high. Consequently, an arbitrary assessment of a low life expectancy in Greek antiquity should be revisited. 9.2.4 Better Housing Conditions

The rise of the standard of living in the Greek world can be also observed from the way houses were built in Greek cities and the countryside. Ault (2007) studied the evolution of Greek housing activity as it related to the local economy and found that between the eighth and fourth centuries BCE, there was a dramatic increase in the size of houses, from about 55 to 230 square meters for the medium to wealthy family. Therefore, these were large houses, even compared to today’s standards.5 Similar findings are provided by Morris (2004, 720–722) who supports that Greek houses usually had six rooms in the Classical period instead of one or two at the end of the Early Iron Age (circa 700 BCE). Apart from the size of the houses, the quality of their construction and their interior decoration were also improved. Proof of this is the mosaics and paintings with beautiful themes, such as in the houses found in Olynthus. Xenophon (Memorabilia, 3.8.8–10) describes the basic amenities a house should satisfy. When one means to have the right sort of house, must he contrive to make it as pleasant to live in and as useful as can be?…to have it cool in summer and warm in winter?…To put it shortly, the house in which the owner can find a pleasant retreat at all seasons and can store his belongings safely is presumably at once the pleasantest and the most beautiful. As for paintings and decorations, they rob one of more delights than they give. A society takes the next step – comforts – only if it has secured the basics – the livelihood. One should not claim that all the houses had mosaics, beautiful decorations and ornate peristyles, which were the privilege of the affluent, but, at least, as Ault claims (p. 262), a great percentage of houses had some important basic amenities, such as a bathroom and spacious waterproof bedrooms. In cities such as Olynthus, many houses that belonged to the middle- or high-income classes of citizens had a bathroom with a small bathtub with a seat (Yegül, 1992). Private baths in Athens are also mentioned by Pseudo-Xenophon (Con., 2.10). This kind of house also included dormitories for salaried staff or slaves or both. A middle- to high-income oikos (house) in Athens and the rest of the Greek world included bedrooms, the bathroom, the gynaikonites (women’s room), the andron where the men of the house lived and the kitchen. Some of the extra rooms on the ground floor were probably for the service staff, while the corresponding extra rooms upstairs would logically be for the accommodation of any extra family members. According to Plato (Laws, 954b–954c) and Aristophanes (Thesmophoriazusae, 414–429), the houses and the shops in the market could be protected (from theft, etc.) by using lockers. The value of a house in Classical Greece, depending on the quality of its construction, ranged between 400–1,000 drachmae. Assuming an average cost of

284  Economic Growth Policies in Classical Athens around 700 drachmae, an average worker, given a daily wage of 1.5 drachmae in the fourth century, would have needed about two years to acquire such a house, provided he would only save this money to buy a house and provided he covered the needs of himself and his family through other means. Regarding the issue of personal hygiene, as already mentioned, most middle- to high-income houses had a bathroom with a small bathtub with a seat. Those citizens and metics who did not enjoy such a privilege, from the fourth century BCE, could resort to public baths, as per the standard of a gymnasia athletic facilities, where for a small fee, any citizen or metic could bathe with hot water (Bresson 2016a, 47; Economou et al. 2023). There were three public gymnasia in Athens: Academy, Lyceum and Cynosarges. Furthermore, Gill (2008), among others, describes the so-called balaneia installations throughout the Greek world (including Athens, of course) which belonged to the state, where citizens, metics and foreigners could access and take a hot bath. Therefore, long before the famous baths of Rome, public baths existed in the Greek city-states, as described by authors such as PseudoXenophon (Con., 2.10). Bresson (2007) praises the personal hygiene of the Greeks to the point of arguing that any ordinary citizen of any Greek polis could have given lessons in hygiene and cleanliness to King Louis XIV of France and his court (seventeenth century AD)! Bresson’s view directly contradicts that of Garland (1998) who characterizes hygiene conditions in Classical Athens as deplorable, wrongly arguing, for example, that due to the lack of any authority responsible for keeping the streets clean, garbage piled up on the streets in huge quantities, creating a terrible stench and posing a serious health hazard, especially during the summer months. This is not correct at all, as explained in detail in Economou et al. (2023). In particular, the Athenian state had established the astynomoi magistrates to ensure, among other responsibilities, the cleanliness of the streets. Furthermore, to ensure the city’s cleanliness, the Athenian state had entrusted this duty, through a 3P agreement, to koprologoi. These were cesspool/sewage pickers who were responsible for emptying the cesspools in each of the 139 demes of Athens. They acted as private scavengers under the direct supervision of the astynomoi, yet another successful case of 3P. In particular, in every Athenian neighborhood any waste from cesspits and latrines produced by each household had to be stored in a particular pit which also functioned as a statutory dump, placed just outside each household. The pits would then have to be emptied frequently by the koprologoi. It is also worth mentioning that the koprologoi collected animal feces from the streets, which could then be sold as fertilizer (IG XII 8 265; Aristotle, Ath. Const., 50.2; Ault 2007). This description is important in two ways: first, it proves that the Athenians (and probably an additional significant number of city-states in the Greek world) understood the importance of hygiene services for the common good. Second, it describes one of the first (if not the first) recorded recycling processes in history; the waste was collected by private entrepreneurs under the central state supervisory authority. Otherwise, waste management would have been a personal responsibility of each household separately.) The koprologoi and astynomoi

Economic Growth Policies in Classical Athens  285 services have also been recorded for smaller cities as well, such as Paros and Thasos (surviving inscriptions IG XII 5, 107 and IG XII). Accordingly, Garland’s (1998) views characterizing the hygiene measures of the Athenians in Classical times as very poor should be rejected outright. 9.2.5 Urbanization

Urbanization refers to the population shift from rural to urban areas. There is no doubt that the Athenian polis was urbanized. According to Ober (2010, 11, 2011, 2015a), urbanization levels in Classical Greece were as high as 30% compared to 10%–12% for Rome. The level for Rome is comparable to that of premodern states such as Britain and France. And there is no doubt that the high growth rates that took place in Athens at various times such as, for example, in the 330s BCE, is a serious indication that the Athenian case illustrates the link between urbanization and economic growth, at least for specific periods during the overall Classical period. 9.2.6 Technological Innovations

A vast amount of literature argues that the development of human societies over the long run is strongly related to technological change and institutions. In Section 2.3, it was stated that, according to Schumpeter ([1942], 2013), economic change revolves around innovations. Other eminent economists, such as Ayres (1944), consider technological progress as the main driver of institutional change. Of course, other factors regarding the evolution of a society, apart from economic progress, should also be considered, such as the climate. There is no doubt that the temperate climate was an important prerequisite for the evolution of the ancient Greek world. But it was not the only factor, nor was it the major one. What I hope has been explained correctly in this book up to this point is that Athenian economic success should be mainly attributed to the superior combined set of political and economic institutions that were implemented and functioned efficiently during the Classical period. This is encapsulated in the famous motto of D. North (1990, 12) that “institutions matter.” This, of course, does not mean that technological innovations did not exist. Finley (1973) argued that Ancient Greece (and Rome) lacked technological progress because of the use of slave labor. But this is not true. Greene (2000) and Bresson (2016), for example, argue that a lot of progress was observed during the Classical and Hellenistic periods in areas such as agriculture, mining techniques, metal-working, pottery – all of which related to the rise of interregional commercial activity. In Ancient Greece, many technological advances took place during the Classical period. These achievements were significantly intensified during the Hellenistic period. Such advances included automatic machines such as automatic doorbells, elevating mechanisms, gear systems for lifting, hydraulic technology, measuring instruments, tools and machines, telecommunication techniques, astronomical

286  Economic Growth Policies in Classical Athens measuring instruments, breakthroughs in textile technology, agriculture, waterpower machines such as the whistling wheel, medical care and surgery tools, advancements in shipbuilding regarding naval journeys either for military or commercial purposes, sport, toys, lamps, refrigeration techniques, measurement of time and space such as sundials and water clocks, military technology such as the catapults introduced by the Macedonians, and even, automata. Many such technologies were related to the provision of public goods. Analytical evidence for these technologies is provided by Lazos (1998), Acton (2014) and Sherwood et al. (2020). Perhaps one of the most spectacular technological breakthroughs during the Hellenistic times was the famous Antikythera mechanism, a highly sophisticated astronomical instrument, even for today’s standards, being the first analogue computer ever made. Many of these breakthroughs could be seen as technological evolutions which had their starting point in the Classical period. But in general, technological progress was related to the evolution of the Greek society as a whole, from the Mycenaean to the Hellenistic times, even if, with some interruptions on specific subperiods, such as the Dark Ages (after the collapse of the Mycenaean-palatial economies). Two exceptional studies discuss the technological achievements of the Greeks in pre-Classical times. In particular, Paipetis (2010) discusses the technological achievements of the Greeks as described by Homer, who narrated the Trojan War (1250 BCE–modern dating), and Mayor (2018), who describes ancient automata such as robotic machines in times that even touch mythology. Notes 1 See also the literature review on this issue in Georgiou et al. (2015). 2 I accept, in advance, that concepts such as GDP and GDP growth rates/economic growth should be used very carefully regarding the interpretation of economic phenomena related to ancient economies for avoiding the critique of historical anachronism. 3 For the financial offices of Eubulus and Lycurgus, a detailed historical analysis is provided by Lewis (1997, 212–230). 4 To read this letter in full, see: http://www​.la​.utexas​.edu​/users​/hcleaver​/368​/368​Keyn​ esOp​enLe​tFDRtable​.pdf 5 The average area of an apartment in today’s Greece, both in big cities and in the countryside, is about 80–110 square meters.

Ancient Greek authors (Perseus Digital Library) Aristophanes, Thesmophoriazusae Aristotle, Athenian Constitution Diogenes Laertius, Lives of Eminent Philosophers Plato, Laws Plutarch, Pericles Pseudo-Xenophon, Constitution of the Athenians Xenophon, Memorabilia Xenophon, Ways and Means

Economic Growth Policies in Classical Athens  287 Modern authors Acemoglu, D., Robinson, J., (2013), Why Nations Fail, New York: Crown Business. Acton, P. H., (2014), Poiesis: Manufacturing in Classical Athens, Oxford: Oxford University Press. Akrigg, B., (2019), Population and Economy in Classical Athens, Cambridge: Cambridge University Press. Alesina, A., Rodrik, D., (1994), ‘Distributive politics and economic growth,’ Quarterly Journal of Economics, 109, 465–490. Alesina, A., Perotti, R., (1996), ‘Income distribution, political instability, and investment,’ European Economic Review, 40, 1203–1228. Amemiya, T., (2007), Economy and Economics in Ancient Greece, London, New York: Routledge. Αndreades, A. M., (1933), A History of Greek Public Finance, Cambridge, MA: Harvard University Press. Ault, B. A., (2007), ‘Oikos and Oikonomia: Greek houses, households and the domestic economy,’ British School at Athens Studies, 15, 259–265. Ayres, C. E., (1944), The Theory of Economic Progress, Chapel Hill, NC: University of North Carolina Press. Bergh, A., Lyttkens, C. H., (2011), ‘Between Burkina Faso and Brazil? Measuring institutional quality in ancient Athens,’ Working Papers, Department of Economics, Lund University. Available at: http://swopec​.hhs​.se​/lunewp​/abs​/lunewp2011​_010​.htm Bitros, G. C., Economou, E. M. L., Kyriazis, N. C., (2020), Democracy and Money: Lessons for Today from Athens in Classical Times, London, New York: Routledge. Bresson, A., (2007), L’ Économie de la Grèce des Cites. Les Structures et La Production, Vol. 1, Paris: Armand-Colin. Bresson, A., (2016), The Making of the Ancient Greek Economy: Institutions, Markets, and Growth in the City-States, Princeton, NJ: Princeton University Press. Bresson, A., (2019), ‘The Athenian money supply in the Late Archaic and Early Classical Period,’ Journal of Ancient Civilizations, 34(2), 135–153. Burke, E. M., (2010), ‘Finances and the operation of the Athenian democracy in Lycurgan era,’ American Journal of Philology, 131(3), 393–423. Canevaro, M., (2018), ‘What was the law of Leptines’ really about? Reflections on Athenian public economy and legislation in the fourth century BCE,’ Constitutional Political Economy, 29, 440–464. Carugati, F., Ober, J., Weingast, B. R., (2019), ‘Is development uniquely modern? Ancient Athens on the doorstep,’ Public Choice, 181(1–2), 29–47. Cohen, E. E., (2002), ‘An unprofitable masculinity,’ in P. Cartledge, E. E. Cohen, L. Foxhall, (Eds.), Money, Labour and Land, London, New York: Routledge, 100–113. Economou, E. Μ. L., Kyriazis, N. C., (2016), ‘Choosing peace against war strategy. A history from the ancient Athenian Democracy,’ Peace Economics, Peace Science and Public Policy, 22(2), 191–212. Economou, E. M. L., Halkos, G., Kyriazis, N. C., (2023), ‘Environmental economics in Classical Athens,’ Journal of Institutional Economics, 19, 102–118. Finley, M. I., (1973), The Ancient Economy, Berkeley: University of California Press. Garland, R., (1998), Daily Life of the Ancient Greeks, Westport, CT, London: Greenwood Press. Georgiou, M., Kyriazis, N. C., Economou, E. M. L., (2015), ‘Democracy, political stability and economic performance. A panel data analysis,’ Journal of Risk and Control, 2(1), 1–18.

288  Economic Growth Policies in Classical Athens Gill, A., (2008), ‘On the road to reconstructing the past: Computer Applications and Quantitative Methods in Archaeology (CAA)’, Proceedings of the 36th International Conference, Budapest, April 2–6, 2008. Available at: https://proceedings​.caaconference​ .org​/files​/2008​/CD27​_Gill​_CAA2008​.pdf Gilpin, R., (1988), ‘The theory of Hegemonic war,’ Journal of Interdisciplinary History, 18(4), 591–613. Greene, K., (2000), ‘Technological innovation and economic progress in the ancient world: M. I. Finley reconsidered,’ Economic History Review, LIII(1), 29–59. Hansen, M. H., (1991), The Athenian Democracy in the Age of Demosthenes, London: Bristol Classical Press. Izdebski, A., Słoczyński, T., Bonnier, A., Koloch, G., Kouli, K., (2020), ‘Landscape change and trade in Ancient Greece: Evidence from Pollen data,’ The Economic Journal, 130(632), 2596–2618. Kallet-Marx, L., (1989), ‘Did tribute fund the Parthenon?,’ Classical Antiquity, 8(2), 252–266. Kroll, J., (2011), ‘The reminting of Athenian silver coinage 353 B.C.,’ Hesperia, 80, 229–259. Kyriazis, N. C., (2009), ‘Financing the Athenian state: Public choice in the age of Demosthenes,’ European Journal of Law and Economics, 27(2), 109–127. Lazos, C., (1998), Engineering and Technology in Ancient Greece, Athens: Aeolos Editions. Lewis, D. M., (1997), Selected Papers in Greek and Near Eastern History, Cambridge: Cambridge University Press. Loomis, W. T., (1998), Wages, Welfare Costs and Inflation in Classical Athens, Michigan, MI: Michigan University Press. Lyttkens, C. H., Gerding, H., (2018), ‘Understanding the politics of Perikles around 450 BC. The benefits of an economic perspective,’ in M. Canevaro, A. Erskine, B. Grey, J. Ober (Eds.), Edinburgh Leventis Studies, Ancient History and Contemporary Social Science, Edinburgh: Edinburgh University Press, 269–292. Mayor, A., (2018), Gods and Robots: Myths, Machines, and Ancient Dreams of Technology, Princeton, NJ: Princeton University Press. McAuley, A., (2013), ‘Officials and office-holding,’ in H. Beck (Ed.), A Companion to Ancient Greek Government, Malden, MA: Willey-Blackwell, 174–190. McHugh, M., (2019), ‘Going the extra mile: Travel, time and distance in Classical Attica,’ The Annual of the British School at Athens, 114, 1–34. Migeotte, L., (2009), The Economy of the Greek Cities. From the Archaic Period to the Early Roman Empire, Berkeley, Los Angeles, London: University of California Press. Morris, I., (2004), ‘Economic growth in ancient Greece,’ Journal of Institutional and Theoretical Economics, 160, 709–742. North, D. C., (1981), Structure and Change in Economic History, New York: W.W. Norton and Company. North, D. C., (1990), Institutions, Institutional Change and Economic Performance, Cambridge: Cambridge University Press. Ober, J., (2008), Democracy and Knowledge. Innovation and Learning in Classical Athens, Princeton: Princeton University Press. Ober, J., (2010), ‘Wealthy Hellas,’ Transactions of the American Philological Association, 140, 241–286. Ober, J., (2011), ‘Wealthy Hellas,’ Journal of Economic Asymmetries, 8(1), 1–39. Ober, J., (2015a), The Rise and the Fall of Classical Greece, Princeton: Princeton University Press.

Economic Growth Policies in Classical Athens  289 Ober, J., (2015b), ‘Classical Athens,’ in A. Monson, W. Scheidel (Eds.), Fiscal Regimes and the Political Economy of Premodern States, Cambridge: Cambridge University Press, 492–592. Ober, J., Scheidel, W., (2022), ‘Inequality,’ in S. von Reden (Ed.), The Cambridge Companion to Ancient Greek Economy, Cambridge: Cambridge University Press, 404–420. Paipetis, S., (2010), The Unknown Technology in Homer, Heidelberg, London, New York: Springer Dordrecht. Perotti, R., (1996), ‘Growth, income distribution, and democracy: What the data say,’ Journal of Economic Growth, 1, 149–187. Pomeroy, S. B., (1995), Goddesses, Whores, Wifes and Slaves, New York: Schocken Books. Rhodes, P. J., (1992), ‘The Athenian revolution,’ CAH, 4, 62–95. Samons, L. J., (1993), ‘Athenian finance and the treasury of Athena,’ Historia: Zeitschriftfür Alte Geschichte, Bd., 42(2), 129–138. Scheidel, W., Morris, I., Saller, I., (2008), The Cambridge Economic History of the GrecoRoman World, Cambridge: Cambridge University Press. Schumpeter, J. A., ([1942], 2013), Capitalism, Socialism and Democracy, London: Routledge. Sherwood, A. N., Nikolic, M., Humphrey, J. W., Oleson, J. P., (2020), Greek and Roman Technology. A Sourcebook of Translated Greek and Roman Texts, London, New York: Routledge. Taylor, C., (2017), Poverty, Wealth, and Well-being: Experiencing Penia in Democratic Athens, Oxford: Oxford University Press. Temin, P., (2013), The Roman Market Economy, Princeton, NJ, Oxford: Princeton University Press. Thorley, J., (1996), Athenian Democracy, London, New York: Routledge. Van Wees, H., (2013), Ships and Silver, Taxes and Tribute. A Fiscal History of Archaic Athens, London, New York: I.B. Tauris. Yegül, F. K., (1992), Baths and Bathing in Classical Antiquity, Cambridge, Massachusetts: MIT Press.

10 Social Welfare Policies through the Provision of Public Goods

10.1 The Provision of Public Goods by the Athenian State The analysis of this chapter is strongly connected with the previous ones in the sense that it would have been a discrepancy to argue that the Athenian case discussed here functioned under the (basic, at least) principles of a free market economy without a welfare state that provided public goods. In his seminal paper entitled The Pure Theory of Public Expenditure, the eminent scholar, P. Samuelson (1954), defined a (pure) public good (Pub.G) as follows: [goods] which all enjoy in common in the sense that each individual’s consumption of such a good leads to no subtractions from any other individual’s consumption of that good. (p. 387) Thus, a good can be defined as a public good if it has one or both of the characteristics of jointness in consumption and non-excludability. A public good is nonexcludable if, once produced, the producer cannot prevent people from consuming the good or deny them the service. In other words, once a public good is produced, it can be enjoyed not only by one or very few people but also by everyone at no additional cost. Such goods, including, among others, national defense or police services, are known as collective-consumption or non-rival consumption goods (the terms are used interchangeably).1 Another dimension regarding public goods is that their consumption is also a matter of individual preference. Due to the non-excludability situation, some people consume a public good more than others. Those who are especially fond of a particular public good and consume it more than others, actually pay proportionately less than they would have been willing to pay if a fixed pricing system existed (Alchian and Demsetz 1973). In the case of Classical Athens, it is important that eminent scholars such as Ober (2015a, 113, 2015b, 494) convey the view that some Greek city-states encouraged investment by citizens in learning skills relevant to the provision of public goods. Thus, in principle, public goods benefited all citizens and all members of the Athenian community. In this and the following subsections, an attempt is made to reproduce the evidence regarding the Athenian state as public-goods provider. DOI:  10.4324/9781003434146-10

Social Welfare Policies through the Provision of Public Goods  291 10.1.1  The Offices Regarding Public Administration

Section 9.1 analyzed in detail the offices regarding public administration. There is no doubt that these public officials offered important services related to a plethora of public goods, from protecting consumers by suppressing profiteering in the market, to ensuring sanitation in the polis. A series of public buildings were necessary for the Athenian public administration to function effectively. These included, among others, the Bouleuterion, the Tholos or Prytaneion, the Metroon, the Heliaia court, the court of Areiopagos, the TTAGs, the Argyrocopeion, the Agoranomia, the Strategeion, the Monument of the Eponymous Heroes, the Athenian Desmoterion and stadia and gymnasia etc. Thus, various services provided by public magistrates, including public building infrastructure, and should be seen as public goods in a wider sense. There is no doubt that to establish all these institutions, the Athenians dedicated much time, money and effort in advance. 10.1.2 Police Services

In Section 8.1 and elsewhere, references have been made to the institution of astynomoi being responsible for maintaining order and cleaning the city. Also mentioned were the hendeka, a board of 11 public officials responsible for the state prison of Athens who, in their duties, were assisted by the 300 Scythian archers. These were a group of public slaves under the supervision of the hendeka. 10.1.3  Ensuring an Effective Water Supply System

Water is an essential element of our lives, and modern medicine claims that frequent use of clean water can improve our health, our physical condition and even our appearance. During Classical times, the Athenian state established a water supply system based on both public and private wells. Archaeological evidence has identified more than 400 wells in Athens with a great variation in depth, ranging from 2.5 to 37 m, dating from the early Classical to the Roman period (Angelakis et al. 2016). Furthermore, the Athenians had instituted the post of epilemetes epi ton hydaton kai ton krounon, a magistrate position that required special knowledge with the duty of supervising the distribution of water and the cleanliness of the springs. One can imagine that it would have been almost impossible for him to supervise and ensure all by himself the fair distribution of water for all wells, fountains and springs throughout the polis. From Aristotle (Ath. Const., 43.1), we learn that a number of guards were responsible for the proper daily use of the public springs and fountains. And in 333 BCE, the Athenians awarded a gold wreath to Pytheus, the officer of fountains at the time, because he restored and maintained several fountains and aqueducts. According to Koutsoyiannis and Mamassis (2017), the Athenians developed a functioning network of public water supply consisting of wells, fountains, springs, large aqueducts and gutters, but there were also a number of private springs and

292  Social Welfare Policies through the Provision of Public Goods wells. This infrastructure was built during the time of the tyrant Peisistratus and his sons and was further developed during the Classical period. The water supply network was accomplished through gutters that reached a depth of up to 14 meters. Crouch (1994) and Koutsoyiannis and Mamassis (2017) describe in detail the technical parameters of such a water supply network in Classical Athens by providing informative images. The gutter system was constructed in sections and in various phases. This sounds logical, as it was a very big project. It is enough to consider how much time and effort it takes when changes need to be made to the water pipes system in a modern town, which means closing roads and entire urban complexes to traffic, etc. Thus, the construction of a gutter system by the Athenians can be considered a costly expenditure on a public good. Parts of the ancient piping of this ancient water supply system were discovered during the course of the Metro excavation works, near Syntagma Station in the heart of Athens during the 1992–2013 period. Many water system relics from the Classical period still survive and include the row of cisterns north of the Parthenon, the formal fountain of the Clepsydra spring, surviving buildings of the sanctuary of Asclepius, and the sanctuary of Nymph at the foot of the hill (Crouch 1994, 275). Finally, it is also known that both at the city and the deme level, and on the initiative of the citizens themselves, flood protection works were also carried out (Dem., Against Callicles, 55.17, 20). 10.1.4 The Existence of a Functional Street and Road Network

Pikoulas (2007, 82–86) provided evidence regarding the existence of road networks, such as carriage roads, throughout Greece for commercial and other usages. Of course, there also existed systems of roads for pedestrians only, rock-cut steps, etc. A huge system of smaller pathways was also in existence. Lolos (2003), whose research focused on the road networks in Ancient Greece, verifies the existence of an extensive network of roads, “highways,” paths, etc., connecting different states throughout Greece. Regarding Classical Athens, the excavations in the Mesogaia of Attica brought to light a dense and high-quality road network (for the era), well-laid out and with good signage on which not only people but also carriages could move easily. Several other similar cases have been confirmed by excavations outside Athens, such as on islands and in Crete and Miletus, etc. (Bresson 2007, 125, 207). McHugh (2019), based on a vast relative literature, provides an extensive analysis of the road network of Attica from the Archaic period (and perhaps earlier) onward. It extended throughout Attica and was progressively constructed and, perhaps, regularly maintained, either by the state or local communities. She also provides very helpful and explanatory maps regarding how the 139 Athenian demes were placed (in topographical terms) within the entire region of Attica, an area of approximately 2,500 km2. These maps include road routes and paths and denote that there existed an efficient and functional road network (at least during) the Classical period throughout the “twin city-state” of Athens–Piraeus. McHugh further argues that the maintenance of the road network throughout Attica was based

Social Welfare Policies through the Provision of Public Goods  293 on hodopoioi and astynomoi, including the slaves of both groups, but what is also important is that every deme was also responsible to take care of the maintenance of the road network in the area of its jurisdiction. 10.1.5  Urban Spaces, Recreation and Beautification of the Athenian Polis

The agora was the most dynamic part of the city-state of Athens, undergoing rapid development from Archaic to Hellenistic and Roman times (Hölscher 2007, 168, 171, 178). In appropriate places in the agora, there were circular installations used as meeting places for small assemblies, with the speaker in the center, the elder noblemen seated in an inner circle and other men of the community standing around them. Dances and athletic contests also took place in these places. In Section 5.1, a series of specific public works that supported the functioning of the agora was presented, such as the Poikile Stoa. Hölscher (p. 178) adds that in the late fourth century BCE, the agora became a place where the citizens came together to enjoy the atmosphere of historical greatness and a place where philosophers of the Stoic school continued the great intellectual tradition of Socrates, Plato and Aristotle. The agora was also a meeting point where tourists could admire the infrastructure and the monuments of the famous polis. An array of public open spaces and civic structures included the agora, the Acropolis, the Olympeion, the Odeon, the Theatre and the Hephaestium at Athens. The Panathenaic Way played a major role in the Panathenaia procession, Athens’s most important religious event, and allowed participants to experience all the public open spaces and civic structures. There were also public garden areas that functioned as recreation areas. They were to be found not in towns but in the suburbs and the countryside. The trees and plants in them were associated with particular deities: the oak with Zeus, the laurel with Apollo, the myrtle with Aphrodite and so on. One example is the gardens of the modest house that Epicurus bought just outside the walls of Athens in 306 BCE. There were also circular colonnades known as monopteros such as the Monument of Lysicrates in Athens made in 335/334 BCE by a choregia of Lysicrates, a wealthy patron of musical performances. Furthermore, the rivers Eridanos, Ilissos and Kifissos in combination with the hills, including Lycabettus, the Nymphs, Areiopagos, Filopappos (or the Hill of the Muses) and Pnyx, provided opportunities for recreational walks. In Section 9.2, it was argued that Eubulus’s and Lycurgus’s extensive fiscal expansionary programs included the construction of or repairs on monuments such as the Dionysus Theater under the Acropolis, a large theater which could host 14,000 to 17,000 spectators, a number of local theaters in various municipalities and a new Panathenaic stadium. All these works were related to recreational activities and to the further beautification of the city. All this infrastructure is related to positive externalities, under a modern perspective; citizens, metics, foreigners and tourists who temporarily visited Athens and even slaves (to some extent) could enjoy themselves in areas such as in the Acropolis Hill, the Temple of Olympian Zeus, the Chryselephantine Athena and the Monument of the Eponymous Heroes or take a ride to the river Eridanos, etc.

294  Social Welfare Policies through the Provision of Public Goods 10.1.6 Measurement of Time as a Public Good

Regarding the measurement of time, we all know the famous saying: “time is money.” So did the Greeks. Days in Greece were divided into hours of light and darkness. The hours of light were longer in summer because the day was longer and shorter in winter. There were 12 months, as there are today, and the year had 354 days. The dating between the years was done based on the Olympic Games combined with the tenure of specific Athenian eponymous archons. For example, Athenians might say something like: “This event happened two years after the ‘X’ Olympiad,” or “when eponymous archon was ‘Y.’” Time was measured with sundials, water clocks, hydraulic clocks etc. The ancient Greeks developed many of the principles and forms of the sundial. Sundials are believed to have been introduced into Greece by Anaximander of Miletus, c. 560 BCE. In the National Archaeological Museum of Athens, there are seven sundials of marble construction. Four of these sundials were recovered from the ancient Dionysus theater, which is located under the southern cliff of the Acropolis. 10.2 Public–Private Partnerships for the Provision of Public Goods This section analyzes the cases in which various important public goods were provided in cooperation and co-financing with the private sector, through the institution of liturgies. I have already referred on such a category as public–private partnerships for public goods (3PPub.Gs), as developed in the modern literature (Besley and Ghatak 2017). 10.2.1 Defense

In Section 3.1, it was briefly argued that the phalanx formation – that is, the Athenian land army – was based on citizen militia coming from the middle-income class, known as the hoplites. Low-income citizens could serve as light infantry support troops but mostly as thetes in the navy. It is also known that during the Peloponnesian War, the Athenians resorted to mercenaries in their full-scale struggle with the Spartans. This was an extra amount of expenditure to meet the necessitated needs of the polis regarding defense matters, and it certainly related to the provision of public goods for defense purposes. In Section 2.3, the responsibilities of the ten strategoi were analyzed. Other high-ranking officials in the phalanx formation, subject to the strategoi, were the ten taxiarchoi (brigadiers) and the ten lochagoi (the commanders of a subunit of the phalanx, the lochos). The taxiarchoi may have been elected, one from each tribe. There was another rank, the two hipparchoi (cavalry commanders), slightly inferior to the strategoi and above the taxiarchoi. The ten katalogeis were a board of ten magistrates responsible for keeping a register of citizens serving in the cavalry (Hansen 1991, 359). It has proved difficult, so far, to define the exact number of lochagoi.

Social Welfare Policies through the Provision of Public Goods  295 Young male Athenians 18–19 years of age, known as ephebes, went through the institution of ephebeia (Arist, Ath. Const., 42.1–5). It was a two-year, state-funded and organized program which focused on the military training and coincided with the ephebes two-year mandatory military service. Their training included hunting, controlling aggression, patrolling the city’s walls, guarding the border fortresses and, in general, becoming efficient in the arts of warfare and surviving under extreme conditions. The idea behind ephebeia was that, if the state were ever threatened, its men would have the necessary skills and the character to defend it. And because, according to Aristotle (Ath. Const., 53.4), all eligible citizens of ages 18 through 59 should bear arms, an ephebe could be drafted at any time, grouped by age based on permanent rosters displayed in the agora (Christ 2006, 52). The Athenian demos probably instituted the ephebeia after Alexander’s destruction of Thebes in September 335 BCE because they needed a standing army to defend Attica. Ephebeia’s project cost was subsidized. At the end of his service, the ephebe was reincorporated back into society as a man and a citizen. Thus, for two years, a young male was performing his military service to the polis, and then, by giving the Oath of the Athenian Hoplites, he became, at the age of 20, a citizen of the state, enfranchised with voting rights. The cost of public infrastructure for defense purposes should also be added to this discussion. As argued in Section 5.5, the Long Walls between Athens and Piraeus cost 600T, the Phaleric Wall (6 km) cost 300T and the neosoikoi infrastructure cost 250T. The system of fortresses that the Athenians deployed throughout Attica for defense purposes must also be considered. Ober (1985) provides a detailed analysis of this issue in his book Fortress Attica. He argues that during the period after the Peloponnesian War, to counter new offensive strategies and to protect vital local sources of revenue, the Athenians instituted a system of territorial defense, based on massive frontier fortresses and a sophisticated signal network. Parts of some of these fortresses, such as that of Aigosthena or Eleutherai, can still be visited today. To be built, such fortresses required a large amount of money. ​ Regarding the navy, as has already been argued, the cost of building a trireme was covered by the Athenian public, but the running expenses were assigned to a wealthy Athenian. As already argued, it is probable that in peacetime, the Athenians could maintain (at least) 20 combat-ready triremes and 60 mobilized as a minimum for service in the sailing season for six months (Gabrielsen 1994, 216). Thus, given that the crew of each trireme was 200 men, in peacetime, the state employed military forces of at least 4,000 men. In Section 9.1, it was argued that the Athenian population during the fourth century BCE was about 30,000 citizens. This means that even in peacetime, at least 13.3% of the citizen population was occupied by the navy. This number is a fairly good estimate, but not entirely correct, as a (usually small) percentage of rowers consisted of metics and, in some cases, slaves could be also conscripted. Furthermore, the state also paid money for the building and maintenance of the neosoikoi and the neoria, as well as their security through the 500 neoroi/epimelitai ton neorion. In any case, one can reasonably estimate that the defense budget of the Athenian state covered the largest percentage of the annual public expenditures.

296  Social Welfare Policies through the Provision of Public Goods

Image 10.1  The author in front of a part of the Aigosthena fortress. Source: Photo by the author.

Andreades (1933, 220) has estimated the total defense expenditure cost before the Peloponnesian War at about 300T. And if one accepts that in 431 BCE, the Athenian state budget was 1000T, as argued above, this means that 30% of the state budget was channeled for defense purposes, a very large percentage. But this percentage did not include the defense expenditures due to the war. And there is no doubt that if these expenditures are added, the total annual cost for the public good of defense would have been much higher. During the Peloponnesian War, the Athenian defense expenditures skyrocketed. This is an intertemporal phenomenon. For example, the defense expenditures of the USA and the UK, as a percentage of the gross domestic product (GDP), were 37.2% and 52%, respectively in 1945, the last year of WWII.2 Pritchard (2015, 36) argues that during the 420s, the annual public spending average on the armed forces was 1,485T, a colossal amount of money. In the fourth century, the Athenians fought constantly from 396 to 386 and from 378 to 338, with only brief periods of respite. In the fifth century, they waged wars in two out of three years and campaigned on multiple fronts from 431 to 404 (Pritchard 2015, 122). Mobilizing vast armies and elongated campaigns was very costly. The siege of Samos cost at least 1,275T; Potidaea cost 2,000–2,400T; and the Sicilian Campaign, which Thucydides (2.70.2) characterizes as the “most costly,” burdened the Athenian budget with not less than 4,500–5,000T. As a sum, the first seven years of the Peloponnesian War cost at least approximately 5,000T (Andreades 1933, 221–222). As a final comment, it is again an intertemporal phenomenon that defense expenditures occupy a large part of the annual state budget. For example, US defense

Social Welfare Policies through the Provision of Public Goods  297 expenditures amounted to 754 billion US dollars in 2021, which was about 3.3% of the US GDP and amounted to 11% of total federal spending.3 10.2.2 Diplomatic Missions

In Section 5.7, the institution of proxeny was analyzed as it related to diplomatic relations among the Greek and other states throughout the Mediterranean and elsewhere. In Section 8.5, a reference was made to the high-speed triremes, the Paralos and the Salaminia, used on special diplomatic missions. In general, diplomatic missions were costly in order to be substantial and successful, as they sometimes required the mobilization of a whole group of ambassadors and many days of stay. For example, Andreades (1933, 226) mentions an Athenian embassy, composed of ten Athenians, which was sent to King Philip II of Macedon in the year 346. To carry out its commission, it spent about 70 days away from Athens with a running cost of 1,000 drachmae. Each of the ambassadors cost 100 drachmae (Demosthenes, On the False Embassy, 19.158). Theoretically, it was not a very costly mission. It means the cost for each ambassador was 1000/10 = 100 drachmae. And because the mission was for 70 days, we have 100/70 = 1.42, or ~1.5 drachmae a day, which coincides with the daily wage of a median worker in the fourth century. If this was, in general, the trend regarding the cost of diplomatic missions of Athens and other states, it was a very logical one. One can compare these sums with the exorbitant sums that many of the current diplomatic missions of modern states cost. 10.2.3 Hygiene Services

Ensuring a high level of hygiene is among the top priorities for societies that are characterized by strong economies. Especially now, with the current COVID-19 global pandemic, hygiene is of top priority in the agenda of politicians, policymakers, scientists and physicians specializing in epidemiology as a critical and successful precautionary measure. Bathing, as a primary form of hygiene, played a critical role in the lives of the ancient Greeks, as attested by the archaeological findings. According to Gill (2008, 208–209), the earliest references to baths and bathing in Greece date to the eighth century BCE when Homer refers to the bathing of Homeric heroes in single tubs. Bathtubs have already been found at Knossos, Mycenae and Pylos since the Mycenaean Age period (1600–1100 BCE) which denotes that private bathing was an established social behavior already existing at even much earlier times. As was discussed in Section 9.1, the median house in Classical Athens had a bath. Gill (pp. 209–210) argues that the balaneion, or Greek public bath, was wellestablished in Athens. The earliest of these urban baths dates to the mid-fifth century BCE. A famous one was located outside the gate of Dipylon in the Kerameikos area of Athens. In general, Greek baths can be found throughout the Mediterranean. They have been found at Olympia, Isthmia, Delphi, Nemea, Corinth, Athens, Delos, Epidaurus, Messene and several other places on mainland Greece. They can also be found, among others, in Alexandria (Egypt) and Syracuse (southern

298  Social Welfare Policies through the Provision of Public Goods Italy). According to Gill (p. 209), the location of the Kerameikos baths outside the city walls on the west side of the road leading to the Academy suggests that this urban bath served both private and social purposes and was frequently used by a diverse clientele entering Athens through the Dipylon gate coming from the port of Piraeus. Public baths were often located outside the walls of a city, examples of which can be seen, except Athens and Piraeus, also in Eretria and Eleusis, among others. Anyone entering the city, whether a citizen or a foreigner, could use them, and this could reduce the risk of epidemics. What is also important to bear in mind is that gymnasia athletic facilities also provided baths, similar in philosophy to a modern fitness center. Each gymnasium was supervised by a magistrate called the epistates. Furthermore, as has already been mentioned, specific state services existed providing street-cleaning services such as the astynomoi and the koprologoi. In addition, Antoniou (2007) mentions various primary ancient sources which testify the interest of the Athenian authorities in keeping public spaces tidy with the construction of public toilets. What is also important is that, according to Crouch (1994, 28), who has extensively studied the water and sewage system in Ancient Greece, Greek cities came to have sewers under the street pavements in residential areas, as well as great drain channels through the public areas. According to Bresson (2007), many Greek citystates had an underground sewer network, such as the cities of Athens, Ephesus, Delos, Rhodes and Akragas after 480 BCE. In addition, aqueducts already existed from the Archaic period, the completion of which had been undertaken by various tyrants, such as Periandros in Corinth, Theagenis in Megara, Peisistratus in Athens and Polycrates in Samos with the famous Eupalinian trench. This was a tunnel 1,036 meters long near Pythagorion in the city-state of Samos to serve as an aqueduct. It is undoubtedly proof of the high level of know-how that the Greeks had developed regarding the opening of tunnels and the construction of water supply networks. Drainage elements known within Greek cities included eaves troughs for individual buildings; drainpipes piercing the walls or foundations of individual houses; collector channels in neighborhoods, such as those in a Hellenistic quarter in Akragas; and great drains in public areas such as the agora at Argos. 10.2.4 Health Care

In Athens and other Greek city-states, there was a parallel three-tier system for the provision of health care services. Regarding the first tier, as is the case today, the remuneration of a private doctor depended on the quality of his services. Doctors circulated widely throughout the Aegean and beyond to satisfy the need for medical skills (Harris and Lewis 2016, 17). The most famous and capable doctors, who were in greater demand by society, demanded a higher salary for their services and vice versa, as another proof of the law of supply and demand, this time from the field of health services. Regarding the second tier, doctors were hired and remunerated by the state on an annual basis, to provide medical treatment to a city’s patients. Throughout the Greek

Social Welfare Policies through the Provision of Public Goods  299 world, this kind of “public doctor” was hired and paid by city-state authorities under a 3P system and was obliged to provide his services whenever asked by any potential patient. Aristophanes (Acharnians, 1027–1032) mentions Dikaiopolis who prompts the poor and blind farmer to visit the famous surgeon Pittalos. The annual wage of a public doctor in the city-states of Classical Greece was around 500 drachmae, but in the following centuries, their pay was very much increased. In many cases, the public doctors created fortunes, like the doctor of Delphi Philestos who, in the third century BCE, offered as a donation to his home-city-state of Kos the sum of 4,000 drachmae to cover military expenditures. To be chosen to provide such 3P services, a candidate doctor had to convince the city-state citizens about his talents and exceptional abilities (Plato, Gorgias, 456b). Finally, public doctors had to be present at all public events such as feasts and athletic events so that they could immediately treat athletes and other participants in case of injury. Also, public doctors had special duties, such as medical supervision during military training and service. Doctors, both public and private, were organized in associations centered on the cult of Asclepios. Regarding the third tier, there were the so-called asclepeia, large medical care centers that also included temples of worship. The asclepeia were sacred places of worship of the hero, holy doctor and healer god, Asclepios, but in practice, they were the first-ever hospitals not only in the Greek area but also in all expressions of Western civilization. According to Risse (1990, 56), an asclepieion included carefully controlled spaces conducive to healing. Each asclepieion consisted of a large complex which also included a temple, a stadium, a gymnasium, a library and a theater. Access to these amenities promoted self-therapy through rest, relaxation and exercise. They could be seen as predecessors of modern spa resorts. Additional activities such as baths and treatment practices related to sleep were central to the healing process. Buildings such as the stadium, the hippodrome, the gymnasia and the palaistra (see below on palaistra), all found near the temples, were used as exercise sites and areas where gymnastic games and entertainment took place. These facilities were considered necessary for the psychological part of the recovery procedure of the patient (Lyttkens 2011). Written sources and/or archaeological evidence have revealed the existence of more than 320 asclepieia throughout the ancient Greek world. Asclepieia such as that of Epidaurus, belonged to or were either run jointly by a series of city-states or by only a city-state itself. The largest and most famous were those of Trikke, Athens, Corinth, Troezen, Messene, Megalopolis, Epidaurus, the island of Kos and Pergamon (Christopoulou et al. 2009). 10.2.5 Education

Glaeser et al. (2004) have found that there is a causal effect of education on institutions regarding modern economies. And in his seminal paper, Lipset (1959) emphasized the role of education and economic growth in promoting political development in general and democracy in particular. The Athenian educational system, known as paideia, consisted of much more than the technical education of the young Athenians, as it was directly related to the

300  Social Welfare Policies through the Provision of Public Goods cultivation of their moral integrity, leading them to become kaloi kagathoi (virtuous) citizens (Bitros and Karayiannis 2010, 2011). For an analytical view of the Athenian educational system and the values that lay behind it, Pritchard (2003) is a very good source. The public education system during the Classical period was actually a three-stage system of institutions: primary, secondary and the ephebeia educational procedures. It was related to the education of boys only. Primary public education was an eight-year program of study (6–14 years of age). In the first years (possibly between the ages of 6–8), it was focused on gymnastics and physical training. Three kinds of teachers are known to us, grammatists, kitharistai and paidotribai. Grammatists taught courses related to grammar (writing, reading) and mathematics. Students were taught the great poets, such as Homer and Hesiod. The kitharistai (guitarists) taught their students how to play the lyre and sing the works of lyric poets. Finally, the paidotribai were responsible for the physical body development of the kids. They taught them wrestling, boxing, running, throwing the disc, jumping and various other exercises in public athletic facilities. Some other courses such as literature, music and painting were added (but not always). Regarding the public goods perspective, in contrast to those who believe that education in Classical Athens was based only on the private sector through tutors hired by the well-off citizens to teach their children, the reality is that education, at least regarding Athens, was partly undertaken by the state itself. Beaumont (2012, 135) notes that from the mid-fifth century, the state intervened in the provision of formal schooling in the case of i) boys whose fathers died in a battle fighting for the city, ii) sons of poor unpropertied families and iii) thetes. This meant that, as was the case with the provision of many other services of public interest, the state outsourced elementary level education to tutors on behalf of the boys that came from these three categories of citizens. These tutors were not public magistrates or civil servants. They were private tutors hired by the state for a fee under a 3P logic. What is very important is Point iii, as thetes constituted of a large part of the society. If the children of thetes were indeed included in the funding of education, then, one can really speak about the partial provision of a public good, education, at least at the elementary level, that covered a large part of the children of the polis. Regarding the “secondary” level of education, after turning 14 years old, boys from wealthy families had the option of attending “secondary school.” Such services were provided by the private sector only, through philosophers such as the Sophists or other philosophers such as Zeno of Elea and Anaxagoras of Clazomenai. Secondary education included subjects such as natural science (biology and chemistry), rhetoric, geometry, astronomy and meteorology. The wealthy families could choose to educate their male children with a slave tutor, known as a paidagogue. Thus, in reality, the children of poor families did not have access on the secondary educational system, which, according to Xenophon (Constitution of the Lacedaimonians, 2), was a humbling indictment of the Athenian educational system. Perhaps it would not have been an exaggeration to argue that Xenophon’s relative views coincide with those of the eminent philosopher of Classical political economy John Stuart Mill regarding education. In his Considerations on

Social Welfare Policies through the Provision of Public Goods  301 Representative Government, Mill (1861 [1991], p. 70) analyzed the nexus between paideia and democratic governance in Classical Athens specifically. In this essay, Mill (in accordance to Xenophon’s and Lipset’s (1959) ideas), further argued that qualitative education was an important prerequisite for participating in decisionmaking under democratic governance. The third stage of education of a young Athenian was related to ephebeia at the age of 19, in which he was obliged to serve his two-year military service, as has already been analyzed. As a final comment, the Athenian educational system was undertaken by both the public authorities and the private tutors. And although the children of poor families were educated only at the elementary level and through ephebeia, it cannot be disputed that at least the Athenian educational system was trying to ensure a minimum level of education for all its male children. Literacy was important for the effective functioning of democracy so that citizens could read the laws that were also inscribed in stelae in public spaces. Further education of citizens in general, such as in high moral standards, could be provided through an indirect way: low-income citizens could further educate themselves on moral values and kalos kagathos behavior by watching and participating in theatrical plays through the provision of the theorika payments. Education was also provided indirectly by the participation of citizens in the Assembly and the courts hearing the speeches of orators with expertise (Andreades 1933, 229; Manville and Ober 2003; Kyriazis and Economou 2015; Economou and Kyriazis 2019). 10.2.6 Athletic Infrastructure

The ancient Greeks implemented what the Roman poet Juvenal characterized in Satire X as mens sana in corpore sano – that is, a healthy mind in a healthy body. They believed in the physical balance between the body and mind. The value of sports entered the frame of mind of young Athenians from a very early age through the educational system. Every man could enjoy various sporting activities such as joining a wrestling school, known as palaistra, for exercise. But obviously, there were young men, low-income citizens or metics who could not afford to pay fees for such a service. Here is the role of the state to provide a public good again, through the three public gymnasia of Athens (Academy, Lyceum and Cynosarges). They were run by the public sector but were financed by the private sector through liturgies under a 3P logic. Gymnasia had large sports facilities, and access was free to every free citizen, metics and other foreigners, regardless of income and social class (Fisher 1998). The palaistra functioned both independently and as a part of public gymnasia. A palaistra could exist without a gymnasium as a service that could be provided as a private good, but no gymnasium could exist without a palaistra. Various authors, such as Pritchard (2003, 2013), argue that sports were primarily a privilege of the aristocrats who were more able to finance their sports infrastructure through their personal wealth. However, in Kyriazis and Economou (2015)

302  Social Welfare Policies through the Provision of Public Goods and Economou and Kyriazis (2019), in line with the findings of authors such as Fisher (1998), among others, evidence was provided regarding the democratization process of sports during the Classical period. During the Classical period, a large part of low-income citizens practiced sports, and there were also many winners of non-aristocratic descent in various famous sporting events such as the four sacred Panhellenic Games (Olympic, Pythian, Nemean, Isthmian). The ability of ordinary citizens to play sports “side by side with aristocrats” demonstrates the process of democratization of sports. 10.2.7 Entertainment and Education on Moral Values

In Section 8.3, I characterized the theorika as the “Hollywood of Greek antiquity.” The orator Demades (Plutarch, Moralia, 1011b) characterized the theorika payments as “the glue of democracy.” And he was right because the theatrical performances that were played did not only contribute to the entertainment of the citizens, but they were also a means of promoting moral values and educating society. The theorika were financed by the state and by choregia, a costly liturgy under a 3P logic. The construction and maintenance of the theaters, such as the famous Epidaurus theater, which has perfect acoustics, would have been quite costly, but the Athenians considered it as a public necessity to morally educate the citizens with theatrical plays which exhibited high moral standards and ethics, such as Aeschylus’s Eumenides and Prometheus Bound, Euripides’s Medea and Iphigenia in Tauris and Sophocles Antigone4 and Electra. Finally, as already analyzed through Table 8.10, the Athenians introduced two more liturgies intended for the entertainment of the citizens financed by the private sector, hestiasis and hippotrophia. 10.2.8 Religious Festivals

Most Athenians were religious – some of them perhaps superstitious – but religion did not guide politics from the middle of the fifth century onward (Tridimas 2022). There were about 60 days of religious festivals a year, such as the Dionysia and many related to agricultural work, culminating in the Panathenaic Games. The Athenians were receptive and tolerant to foreign gods, sometimes adopting them and allowing foreigners to worship their own deities. They even allowed the construction of their own temples, such as the temple of the Egyptian gods in Marathon built in 160 AD by Herodes Atticus. The eponymous archon of Athens had religious duties but no involvement in the decisions of the Assembly. Also, while there were priests and priestesses in temples, there was no established priesthood as there was in Persia or even more so in Egypt, or the prophets of Israel, who also had strong political power. Another special feature of the Greek religion is that there was no written dogma but only myths, traditions and practices, in contrast to the Old and New Testaments, or the Indian Vedas. Moreover, the Greek religion itself favored democratic values because the 12 gods functioned as a parliament in which they discussed, disagreed, often insulted each

Social Welfare Policies through the Provision of Public Goods  303 other (e.g., Hera, Zeus) and took different positions, with equal rights between the goddesses and the gods, something that women would only acquire in the twentieth century. The Athenian state financed religious festivals not only by its overall budget but also through liturgies such as arrephoria. 10.3 The Provision of Publicly Provided Private Goods: Social Security for Disabled Persons In this section, again using a modern interpretation, I refer to types of services that do not belong to the categories of either pure public goods or 3PPub.Gs. These include services such as education and social welfare. According to a series of authors, such as Besley (1991) and Blomquist and Christiansen (1995), these services are related to what is known as publicly provided private goods (Pub.Pri. Gs). However, I chose to include the provision of health care services provided in Ancient Athens in the category of 3PPub.Gs because their provision was different to the current practices. Thus, the focus in this section is only on social security services that were provided by the Athenian state, which belong to the Pub.Pri.Gs category. Athens was probably the first state in history to introduce an organized system of social security (or relief for the poor) for disabled persons. Aristotle (Ath. Const., 49.4) and Plutarch (Aristides, 27.1–4) very specifically mention that there was a law regarding such a compensatory mechanism. In particular, there was a special treasurer known as tamias tois adynatois, literally meaning, “treasurer of the disabled,” elected by lot. Citizens who had a property of less than 3 minae (300 drachmae) could be registered and receive a subsidy of 1 obol and later 2 obols per day. This category also included the support of invalid and crippled soldiers (Andreades 1933, 246). Furthermore, one portion of the eisphora tax was channeled to the care of war orphans. This was a social welfare measure. During the predemocratic period, the tyrant Peisistratus introduced a law through which people disabled in war automatically received health insurance from the state. Diogenes Laertius (Lives of Eminent Philosophers, 1.2) traces this policy back to Solon and argues that the sons of such a group of people ought to be maintained and educated by the state. In addition, Plutarch (Sol., 31.2) argues that, at a later time, personal insurance was further expanded to pregnant women. Regarding orphans, it is certain that a kind of insurance was well established in fourth century Athens. Evidence for this can be seen in Plato’s (Menexenus, 248e–249a), Aristotle’s (Pol., 2.1268a 6–11, 4.1299b; Ath. Const., 24.3) and Pericles’s famous Funeral Oration of 430 BCE. According to Thucydides (2.46.1), Pericles referred to this practice at the end of this funeral, saying that: Those who are here interred have received part of their honors already, and I for the rest, their children will be brought up till manhood at the public expense (emphasis by the author).

304  Social Welfare Policies through the Provision of Public Goods Table 10.1 The provision of various versions of public goods by the Athenian state Pure Public Good

Means

Economic Institutions Police Water supply system

Public administration services Astynomoi, hoi hendeka, 300 Scythian archers (number varied) Water supply network, epimeletes epi ton hydaton kai ton krounon An underground sewer network Hodopoioi and their slaves at the city-state and deme level Urban spaces, recreation and beautification of the city of Athens financed by the state Such as public clocks (water clocks, sundials, hydraulic clocks etc.), high-quality street layout

Sewage system Road network Various urban spaces Technological infrastructure 3PPub.G Defense

Foreign affairs Hygiene Health care Education Athletic infrastructure Entertainment

Religion Pub.Pri.G Social security

Means (includes 3P practices) Hoplites (during a campaign), ephebeia, infrastructure (such as city walls, or building of fortresses), logistics (such as fodder for the cavalry, etc.), triremes shipbuilding (3P) and hippotrophia Diplomatic missions abroad, architheoria Public baths, gymnasia (for baths and hygiene), gymnasiarchy, astynomoi, public lavatories (toilets) Private doctors financed at the city-state and deme level (under 3P practices), asclepieia Grammatists, kitharistai, paidotribai, ephebeia Public gymnasia such as Academy, Lyceum and Cynosarges; gymnasiarchy, architheoria Financing the maintenance of theaters, athletic installations and other public buildings and spaces intended for various ceremonies (e.g., religious events) Choregia such as the theorika, hestiasis Various religious festivals financed by the state, arrephoria Means and method War orphans, disabled people, etc.; existence of a special fund for disabled people, thetes (?)

As has already been mentioned and according to Xenophon (W.M., 2.7), at some time in the mid-fourth century BCE, Athens introduced the post of an orphanophylax (a guardian of orphans). He was in charge of making sure that the children of killed Athenian soldiers had their needs taken care of. Further to this, any citizen had the right to denounce any official who did not follow the laws related to the mistreatment of war orphans and women. Pseudo-Xenophon (Con., 3.4) argues that each year the state had to examine any new cases of orphan children. Moreover, the state supervised all female orphans who did not have proper financial means for living. When an orphan became a young woman, she got a dowry from the next closest family member; its amount was proportionate to the assets of this relative. Other states in the Greek world had similar officials to the orphanophylax, such as in Crete, where orphans were included in the common messes known as syssitia5

Social Welfare Policies through the Provision of Public Goods  305 and given equal portions of food with the adult men. The redistributive character of these social policy measures is clear and strong as the beneficiaries – the poor and the disabled citizens and residents – paid no taxes at all while the wealthy were taxed to generate the necessary revenue to finance these measures. Furthermore, the demes were bearing the cost of the funeral of destitute people (Osborne 1985, 75–82) while at times of food shortages, the state often distributed food, either for free or subsidized (Aristotle, Ath. Const., 49.4.; Aesch, Ag., Ct., 3.154). Excluding some historical cases, such as the Byzantine Empire, it took 2,500 years for states to deal again with welfare state issues. In the early 1940s in Great Britain, Lord Beveridge with his Report on Social Insurance and Allied Service (1942) developed the principles for establishing a social welfare and insurance system for the poor. It had to be preceded by the massacre of millions of people in WWII for the democratically advanced states to inaugurate social welfare policies regarding their citizens. One has to imagine how surprised Lord Beveridge would have felt if, after writing his report, had read Lysias’s On the Refusal of a Pension. Table 10.1 summarizes the analysis provided in Chapter 10. Notes 1 For these basic theoretical principles regarding public goods and their status, see the seminal works of Musgrave (1939, 1959), Olson (1965) and Ostrom (1990), among others. 2 See UKpublicspendings​.co​.​uk, NIPA. 3 https://www​.pgpf​.org​/budget​-basics​/budget​-explainer​-national​-defense 4 Antigone, among others, said: “I was born to share love, not hate,” anticipating the teachings of Jesus by almost 500 years later. 5 Syssitia are mostly known with the case of Sparta.

Ancient Greek authors (Perseus Digital Library) Aeschines, Against Ctesiphon Aristophanes, Acharnians Aristotle, Athenian Constitution Aristotle, Eudemian Ethics Aristotle, Politics Demosthenes, Against Callicles Demosthenes, On the False Embassy Diogenes Laertius, Lives of Eminent Philosophers Lysias, On the Refusal of a Pension Plato, Gorgias Plato, Menexenus Plutarch, Aristides Plutarch, Moralia Pseudo-Xenophon, Constitution of the Athenians Thucydides, Histories (The Peloponnesian War) Xenophon, Constitution of the Lacedaimonians Xenophon, Ways and Means

306  Social Welfare Policies through the Provision of Public Goods Modern authors Αlchian, A., Demsetz, H., (1973), ‘The property right paradigm,’ The Journal of Economic History, 33(1), 16–27. Αndreades, A. M., (1933), A History of Greek Public Finance, Cambridge, MA: Harvard University Press. Angelakis, A. N., Voudouris, K., Mariolakos, I., (2016), ‘Groundwater utilization through the centuries with emphasis on Hellenic civilizations,’ Hydrogeology Journal, 24, 1311–1324. Antoniou, G. P., (2007), ‘Lavatories in Ancient Greece,’ Water Science & Technology: Water Supply, 7(1), 155–164. Beaumont, L., (2012), Childhood in Ancient Athens: Iconography and Social History, London, New York: Routledge. Besley, T., (1991), ‘Welfare improving user charges for Publicly Provided Private Goods,’ The Scandinavian Journal of Economics, 93(4), 495–510. Besley, T., Ghatak, M., (2017), ‘Public-private partnerships for the provision of public goods: Theory and an application to NGOs,’ Research in Economics, 71(2), 356–371. Bitros, G. C., Karayiannis, A., (2010), ‘Morality, institutions and the wealth of nations: Some lessons from ancient Greece,’ European Journal of Political Economy, 26, 68–81. Bitros, G. C., Karayiannis, A., (2011), ‘Character, knowledge and skills in ancient Greek paideia: Some lessons for today’s policy makers,’ Journal of Economic Asymmetries, 8, 195–221. Blomquist, S., Christiansen, V., (1995), ‘Public provision of private goods as a redistributive device in an optimum income tax model,’ The Scandinavian Journal of Economics, 97(4), 547–567. Bresson, A., (2007), L’ Économie de la Grèce des Cites. Les Structures et La Production, Vol. 1, Paris: Armand-Colin. Christ, R. M., (2006), The Bad Citizen in Classical Athens, Cambridge: Cambridge University Press. Christopoulou-Aletra, H., Togia, A., Varlam, C., (2009), ‘History of medicine,’ Archives of Hellenic Medicine, 27(2), 259–263. Crouch, D. P., (1994), Water Management in Ancient Greek Cities, Oxford: Oxford University Press. Economou, E. M. L., Κyriazis, N. C., (2019), Democracy and Economy: An Inseparable Relationship Since Ancient Times to Today, Newcastle upon Tyne: Cambridge Scholars Publishing. Fisher, N., (1998), ‘Gymnasia and the democratic values of leisure,’ in P. Cartledge, P. Millett, S. von Reden (Eds.), Kosmos: Essays in Order, Conflict and Community in Classical Athens, Cambridge: Cambridge University Press, 84–104. Gabrielsen, V., (1994), Financing the Athenian Fleet: Public Taxation and Social Relations, Baltimore: John Hopkins University Press. Gill, A., (2008), ‘On the road to reconstructing the past: Computer Applications and Quantitative Methods in Archaeology (CAA),‘ Proceedings of the 36th International Conference, Budapest, April 2–6, 2008. Retrieved at: https://proceedings​.caaconference​ .org​/files​/2008​/CD27​_Gill​_CAA2008​.pdf Glaeser, E. L., La Porta, R., Lopez-de-Silanes, F., Shleifer, A., (2004), ‘Do institutions cause growth?‘ Journal of Economic Growth, 9, 271–303. Hansen, M. H., (1991), The Athenian Democracy in the Age of Demosthenes, London: Bristol Classical Press.

Social Welfare Policies through the Provision of Public Goods  307 Harris, E. M., Lewis, D. M., (2016), ‘Introduction: Markets in classical and Hellenistic Greece,’ in E. M. Harris, D. M. Lewis, M. Woolmer (Eds), The Ancient Greek Economy: Markets, Households and City States, New York: Cambridge University Press, 1–37. Hölscher, T., (2007), ‘Urban spaces and central places. The Greek World,’ in S. E. Alcock, R. Osborne (Eds.), Classical Archaeology, Malden, Oxford: Blackwell Publishing, 164–181. Koutsoyiannis, D., Mamassis, N., (2017), ‘The water supply of Athens through the centuries,’ in K. Wellbrock (Ed.), Cura Aquarium in Greece, Siegburg: PAPIERFLIEGERVERLAG GmbH, Clausthal-Zellerfeld, 31–43. Kyriazis, N. C., Economou, E. M. L., (2015a), ‘Macroculture, sports and democracy in classical Greece,’ European Journal of Law and Economics, 40, 431–455. Kyriazis, N. C., Economou, E. M. L., (2015b), ‘Democracy and education: A history from ancient Athens,’ in J. Backhaus (Ed.), The University According to Humboldt. History, Policy, and Future Possibilities, Heidelberg: Springer Verlag, 75–84. Lipset, S. M., (1959), ‘Some social requisites of democracy: Economic development and political legitimacy,’ American Political Science Review, 53(1), 69–105. Lolos, Y., (2003), ‘Greek roads: A commentary on the ancient terms,’ Glotta, 79(1/4), 137–174. Lyttkens, C. H., (2011), ‘Health, economics and ancient Greek medicine,’ The Journal of Economic Asymmetries, 8(1), 165–192. Manville, B., Ober, J., (2003), A Company of Citizens, Boston, MA: Harvard Business School Press. McHugh, M., (2019), ‘Going the extra mile: Travel, time and distance in Classical Attica,’ The Annual of the British School at Athens, 114, 1–34. Mill, J. S., ([1861], 1991), Considerations on Representative Government. Collected Works of John Stuart Mill, Vol. 29, London: Routledge. Musgrave, R. A., (1939), ‘The voluntary exchange theory of public economy,’ The Quarterly Journal of Economics, 53(2), 213–237. Musgrave, R. A., (1959), The Theory of Public Finance, New York: McGraw-Hill. Ober, J., (1985), Fortress Attica. Defense of the Athenian Land Frontier, 404–322 B.C., Leiden: E.J. Brill. Ober, J., (2015a), The Rise and the Fall of Classical Greece, Princeton: Princeton University Press. Ober, J., (2015b), ‘Classical Athens,’ in A. Monson, W. Scheidel (Eds.), Fiscal Regimes and the Political Economy of Premodern States, Cambridge: Cambridge University Press, 492–592. Olson, M., (1965), The Logic of Collective Action: Public Goods and the Theory of Groups, Harvard: Harvard University Press. Osborne, R., (1985), Demos: The Discovery of Classical Attika, Cambridge: Cambridge University Press. Ostrom, E., (1990), Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge: Cambridge University Press. Pikoulas, Y., (2007), ‘Travelling by land in ancient Greece,’ in C. Adams, J. Roy (Eds.), Travel, Geography, and Culture in Ancient Greece, Egypt and the Near East, Oxford: Oxbow Books, 78–87. Pritchard, D. M., (2003), ‘Athletics education and participation in Classical Athens,’ in D. J. Philips, D. Pritchard (Eds.), Sport and Festival in the Ancient Greek World, Swansea: Classical Press of Wales, 293–351. Pritchard, D. M., (2013), Sport, Democracy and War in Classical Athens, Cambridge: Cambridge University Press.

308  Social Welfare Policies through the Provision of Public Goods Prichard, D. M., (2015), Public Spending and Democracy in Classical Athens, Austin: University of Texas Press. Risse, G. B., (1990), Mending Bodies, Saving Souls: A History of Hospitals, Oxford: Oxford University Press. Samuelson, P. A., (1954), ‘The pure theory of public expenditure,’ The Review of Economics and Statistics, 36(4), 387–389. Tridimas, G., (2022), ‘Religion without doctrine or clergy: The case of Ancient Greece,’ Journal of Institutional Economics, 18(4), 677–691.

11 Epilogue The Athenian City-state Culture: Economy, Freedom, Democracy and the Rule of Law

In an important speech on January 11, 1944, during WWII, United States President Franklin Delano Roosevelt proposed a Second Bill of Rights covering economic and social rights. He argued that: We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. Necessitous men are not free men. In their Democracy and Capitalism, Bowles and Gintis (1986, 149) note that in the modern capitalist world, the well-known ability of markets to reconcile individual interests and collective logic – or at least to substantially mitigate the contradiction between the two – has always been regarded as a precondition for moral and ethical action. In addition, in his seminal book Capitalism and Freedom (1962), Milton Friedman argued that economic freedom and free market economy relationships are the necessary means of achieving political freedom, and specifically refers to Ancient Greece, saying: so also did political freedom in the golden age of Greece and in the early days of the Roman era. (p. 10) Milton Friedman died in 2006. If he were alive today, I imagine he would welcome the findings of current historical research in the past 30 years (as analyzed throughout this book), as he would have observed that Classical Athens is, (perhaps) the first important historical case study in which a series of important institutions that can be found only in modern capitalist economies were valid in practice, to a great extent, even if they were not as advanced as today. A key reason for the historical success of various nations throughout history is that they encouraged free market activity combined with individual freedom and democracy. This nexus, which also serves as an intertemporal axiom, is crucial in the perception of authors such as Hayek (1981) and Acemoglu and Robinson (2013) and many others. What this book argues, in a multi-factorial way, is that the above axioms also applied, more or less, to the daily life practices taking place in the city-state of Athens during Classical times. DOI:  10.4324/9781003434146-11

310 Epilogue Active participation in the commons was achieved through the participation of citizens in the public administration and through the right to vote and to be elected in the Assembly, the Council and the plethora of state posts as public magistrates. Thucydides (2.39.1), referring to Pericles’s Funeral Oration, defines that: We throw open our city to the world, and never by alien acts exclude foreigners from any opportunity of learning or observing, although the eyes of an enemy may occasionally profit by our liberality;…at Athens we live exactly as we please, and yet are just as ready to encounter every legitimate danger. Therefore, Athens was not an introverted society, but being aware of the power of the polis, its citizens felt neither shame nor the need to hide their achievements. To a greater or a lesser extent, this finding is also related to the concept of “open access societies” as defined by North et al. (2009). It is also related to Friedman’s (2006) and Acemoglu and Robinson’s (2013) views that in advanced economies at the global level, the rising standards of living and economic growth tend to make a society more open, tolerant and more democratic. The Athenian society of the times also met this criterion. Athenians were tolerant, less secretive and allowed the free circulation of ideas. Greek religion was not based on any kind of dogma (repressive or not), and dogma did not affect politics because, according to Tridimas (2022), the demos, through the Athenian political institutions, watchfully guarded its decision-making powers, preventing other actors, such as, for instance, a priestly interest group, to challenge its authority. This is an important prerequisite for financial markets to develop and flourish in the long run. Hayek (1981, 165–116) characteristically writes regarding the case of Ancient Greece that: the ancient Greeks…had not only discovered individual liberty and private property, but also the inseparability of the two, and thereby created the first civilization of free men. This further means that the citizens of Athens were, in actuality, the “rulers of themselves.” The success of their democracy was based on what Arrow (1950, 339) characterized as “citizen’s sovereignty.” It is also important to bear in mind that the success of the Athenian state was largely attributed to not being ruled by backstage and interest groups. Because power was exercised directly by the demos of ordinary citizens as a whole, there were no political parties (under the modern definition) and the public administration was not entangled with organized minorities so that today’s phenomena, such as regulatory capture, were almost impossible to happen1 because, under direct democracy, their influence, if any, would be very low. Manville and Ober (2003, 65–66) add that Athenians in their political culture were characterized by a collective orientation, open-mindedness, entrepreneurial spirit and receptivity to innovation and change. The institutional and procedural set up of direct democracy proved effective in establishing trust, homonoia and a “common purpose” or a sense of belonging and common destiny, which was very

Epilogue  311 strong among ancient Athenians and the other Greeks in democratic city-states and federations (Economou 2020). This sense of belonging to a community made membership feasible, practical and emotionally satisfying. Manville and Ober (2003) explain why the Athenian political model of direct participation was successful, saying: Cleisthenes and his colleagues transformed the existing status of “being an Athenian.” They gave it deeper meaning, with language and passionate rhetoric celebrating the values of freedom and equality. They also made citizenship more reliable by formalising the procedure of membership enrollment and certification…Now it was not some elite ruler but your fellow citizens as a community who guaranteed for you your status of citizenship. You became a citizen through a vote by the citizens, and no one but your fellow-citizens could ever take citizenship away from you. The formalization of that status created a new and stronger sense of individual security. That in turn allowed for the growth of the deep mutual trust on which a true company of citizens must be built. (pp. 82–83) Using modern language, the Athenian direct democracy transformed politics into a cooperation and coordination game in which (at least) the majority of citizens, either men or women, were gaining from their participation in it. Eminent American jurist Learned Hand, in a superb speech given in 1944 and published in the collection The Spirit of Liberty (1952), wrote: Liberty lies in the hearts of men and women; when it dies there, no constitution, no law, no court can save it. The Athenians, 2,500 years earlier, had demonstrated that liberty and democracy resided in their souls. Thus, they were willing to “defend the system” from regimes such as the Thirty Tyrants of 404 BCE. So far, eminent scholars such as Buchanan (1954, b) emphasized the role of public discussion in the formation of preferences and values as a behavioral procedure which is fully pertinent in direct democracies. And Friedman ([1962], 2002) adds that free market relations and market cooperation operate voluntarily by individuals. Based on these fundamental principles, individuals cooperate with others because, in this way, they can satisfy their personal preferences more effectively. In the same vein, Carugati (2019) adds that the Athenian “constitution’s” success should be attributed to three principal factors: first, to a consensus building among citizens on a set of shared values; second, to a self-enforcing institutional structure that reflected those values; and third, to regulatory mechanisms for policymaking that enabled tradeoffs to foster growth without jeopardizing stability. The right to actively participate in decision-making through direct and democratic processes was the result of a wider democratic “macro-culture” that gradually emerged during pre-Classical times that culminated in the reforms of Cleisthenes

312 Epilogue and Pericles and Ephialtes in 508 and 463/432 BCE, respectively. This culture was gradually strengthened and inoculated with new values and patterns of behavior such as protection of private property; the value of freedom; political participation in the commons; social networking in general; participation in the hoplite phalanx and the triremes as mechanisms of cooperation and cooperation between people, sports, religious and festival gatherings; and socializing in the agora, the theater and the popular courts, etc. (Kyriazis and Economou 2015a, b; and Economou and Kyriazis 2019). Social networking as a dynamic social process is a very important issue. For example, Jones et al. (1997) have demonstrated the nexus between social networking and modern business performance. And this study, in line with the relative findings of Manville and Ober (2003) and Ober (2008), argues that such a nexus is also verified with the case of Classical Athens, thus, having an intertemporal character throughout time and space. The great success of the Athenian state’s social structure was that it had succeeded in combining the notion of individual (personal) interest through the collective interest of the state and that Athenian patriotism was evident on the battlefield as well as in the financial sacrifices that the majority of the citizens were willing to make in favor of the “common good,” as Tirole (2017) could have argued in a modern interpretation. It appears that for a large part of the citizen population in Athens, the democratic conscience was so strong that in 337/336 BCE, they passed a decree proposed by Eucrates that anyone who attempted to establish a tyranny in the polis was to be sentenced to death, and his collaborators to face very severe punishments. Ober (2015b, 516) adds on this that a robust “democratic equilibrium” emerged from a “game” in which the masses granted generous elites – public benefactors – certain honors and privileges (including positions of political and military leadership), and elites could reliably count on the masses for mobilization (in both land forces and the navy) against outside threats to state security. This strategic balance was sustained via public ideology through the democratic institutions that were introduced dynamically by the majority of society. Lyttkens (1994, 79, 2010, 2011) adds that the (majority of the) rich citizens fulfilled their tax obligations because they believed that other citizens would do the same. This means that Levis’s (1988) criteria for efficient taxation and the ideology of “credible commitment,” as described by North and Weingast (1989), was pervasive, i.e., that all citizens will honor not only a “social contract” in favor of the state but also a “moral contract” with their fellow citizens, for example, in terms of tax obligations, as mentioned in Section 8.9, because as Christ (2006, 9) argues, citizens carried out their duties because this led to reciprocal results. It appears that apart from the rich, the lower income social groups also enjoyed a sufficient level of economic prosperity, so there was a satisfactory distribution of the wealth produced in the economy to the wider society so that Ober (2010, 2011, 2015a) characterizes Athenian society as “rich” for its time and by comparing it with the United Provinces and England, the most developed countries of early modern Europe, between the sixteenth and eighteenth centuries AD. From the

Epilogue  313 descriptions and analysis that preceded in Chapters 4–10, it should be considered as certain that the Athenian economy achieved economic growth, at least in some years, during the “empire” period as well as during the fiscal adjustment programs during the time of Pericles, Eubulus and Lycurgus. Athenian-type democracy was based on the principles of isonomia, isokrateia, isegoria, parrhesia, meritocracy and non-exclusion from the city administration. The Athenian law-abiding citizen-hoplite-public magistrate had to be honest, virtuous, have fulfilled his military and tax obligations and be faithful to the gods and the state (Lysias, Against Andocides, 6; Christ 2006; Bitros and Karayiannis 2013, 11). Athenian society was very strict in confirmed cases of corruption, which it considered aeschine (disgrace). And they were right because, on a more general level, corruption in economic matters could have led to widespread inequality and a significant decline in citizens’ trust in the democratic institutions, as happens in various democracies around the globe today. Thus, abusers of public money were severely punished. In principle, they were obliged to pay compensation equal to ten times the amount of their abuse, and depending on the gravity of their crime, they could be even deprived of their civil rights through the charge of atimia (dishonesty). The characterization of a citizen as atimos in the face-to-face Athenian society was a humiliating situation for every Athenian, which marked the further course of his life. For this reason, Pritchard (2014, 8) argues that the general feature of Athenian behavior was that severe punishments discouraged would-be public officials from committing crimes. As mentioned, to obtain a councilman or a public magistrate status, each candidate before passing into office, passed a test, known as dokimasia, a process of strict criteria with a focus on ethical behavior, the evaluation of which was carried out by either the Council and/or the people’s courts. If the fulfillment of these criteria were universally acknowledged and no objections were raised, then the candidate would assume his duties for one year, after his official approval by the Assembly of citizens, providing that he had sworn to the gods that he would perform his duties prudently and accordingly. If during the dokimasia procedure the candidate was charged with serious offenses, he did not assume office and was most likely permanently excluded from active political life and deprived of his political rights (Fröhlich 2013, 261). As mentioned, there would probably be no greater disgrace than such a punishment. But, of course, it was not the democratic state itself that was responsible for this: the aspiring public servant or councilman was aware (or should have been) of the laws and the consequences of his actions in advance. Therefore, the Athenian state, when punishing or depriving someone of his citizenship, did not “violate his human rights,” as some might claim today. It did not so by acting as an “inhuman state” but to protect society as a whole from its exposure to delinquent behavior, immorality, corruption and moral turpitude. The Athenians applauded the process of dokimasia with particular zeal. Thus, in practice, the Athenian democratic political system, during its historical heyday, managed to create the conditions for policymaking to be carried out by citizens who possessed some important qualifications and virtues, capable to spread a sense

314 Epilogue of “generalized morality” in society, summarized as kalos kagathos behavior. Bitros and Karayiannis (2010) provide further support on this. And as North (1990, 33) argues, achieving a state of ethical behavior in a society also reduces transaction costs, thus, laying the foundations for economic growth. On this issue, James (2015) presents an empirical examination of the relationship between the public morality of people and economic growth and finds a positive relationship between the two. Of course, it also applies that if such values of “generalized morality” are absent, this is detrimental for a society, as phenomena such as corruption, graft and bribery are very likely (or almost certain) to appear, which are further linked to economic inefficiencies (Mauro 1995). From the analysis in Chapters 3–10, it seems that the Athenian state had managed to achieve a high level of consent-building among its citizens. This is homonoia –concord, unity and cohesion – which is nothing more than the “glue of democracy” of the ancient orator Demades (Plutarch Ethics, 1017; Kyriazis 2012). Homonoia, more or less, was achieved through the “turn to the sea” strategy envisioned and implemented by Themistocles; every (or almost every) social group benefited from thalassocracy: i) the rich, as bankers, owners of workshops, shipowners and merchants, but also landowners such as Cimon and Pericles; ii) the “middle-income” class, as craftsmen and landowners, etc.; and iii) the poorest, as sailors in the merchant marine or navy and the triremes, in the port services, as workers in public and private projects and finally, as farmers. Farmers, metics and slaves also contributed significantly to economic growth. Features of this “consensus-building and trust” mentality developed in the Athenian mega-polis included values such as protection of private property; protection of political and civil rights, the rule of law and institutional arrangements that encouraged business activity, including financial infrastructure, a functioning market which facilitated commercial transactions by providing innovative services such as bank lending, private banking, loans, leasing, mortgage, insurance, forms of joint-stock companies and the entrepôt Piraeus and its connection to overseas “international” trade. Further features of this mentality included fair taxation, the implementation of institutions against attempts to forge the currency, the provision of public goods, redistribution of income through welfare state policies to those citizens or children in need, entrepreneurial opportunities to women (at least to some degree) and non-citizens such as metics, slaves and other foreigners as well as the granting of citizenship, subject to conditions, to those foreigners whose commercial activities greatly favored the state. Moreover, the introduction of auditing institutions to ensure the proper functioning of public administration, the introduction of various tamiai for ensuring the proper management of the public finances and the treasury temples of Athena and other gods (TTAGs) being quasi-state institutions (QSIs) all proved crucial for the economic success of the Athenian state, thus, forging further the consent-building mentality of the polis. The Athenians’ sense of duty toward the polis was combined with the concept of civic culture as defined by Almond and Verba ([1963], 1989) which means i) the active participation of citizens in political and social actions through formal

Epilogue  315 or informal organizations and ii) a set of values shared by citizens who interact harmoniously with each other. And as Putnam (1993) argued, it is this active participation that is important in the formation of a “social capital” among the citizens in a society. This is an important component for the consolidation of cooperation and trust between them. The above achievements of the Athenian state could justify the reason why more and more thinkers globally, but also governments of the modern age, seem to realize the benefits, prospects and possibilities that direct democracy promises. For the deficiencies of the representative democracy type of governance, one can read, among others, the contributions of eminent scholars (from different disciplines) such as Michels (1915), with his well-known iron law of oligarchy concept, Arrow’s ([1951], 1963) impossibility theorem and Downs (1957) who presented an economic analysis of democracy by connecting political decision-making to utility issues of voters. For the benefits of direct or participatory democracy in decision-making, one can follow, among others, the philosophical views of Dewey (1916, 1940) or look into more modern approaches as analyzed by Cronin (2009), Barber (2003) and Fishkin (2011) through the concept of deliberative democracy. Dewey was an influential proponent of participatory democracy who, among others, argued that the meaning of democracy is “more than a form of government; it is primarily a mode of associated living, of conjoint communicated experience” (Dewey 1916, 100–101, 304). For him: Democracy is a way of personal life controlled not merely by faith in human nature in general but by faith in the capacity of human beings for intelligent judgment and action if proper conditions are furnished. (Dewey 1940, 224). In my view, “intelligent judgment and action” was achieved in Classical Athens through i) the fertile education of citizens through their active participation in public life via the state posts and ii) through the emergence of the kalos kagathos behavior via the paideia of citizens, which played a crucial role, as the priority of the Athenian educational system was to create conscious citizens imbued by high moral standards who, in principle, were concerned not only for their personal interests but also for the society as a whole. This situation is described in the Epitaph of Pericles (Thuc., 2). Aeschines (Ag. Ct., 16) adds that in the polis of Athens, respect for the laws of the state was of paramount importance. There is extensive contemporary literature linking political institutions, direct democracy and better economic performance. Several economic and econometric studies show that under direct democracy, economic growth is higher, with less waste of public money (see for example, Feld and Savioz 1997; Cronin 1999; Matsusaka 2005a, b). The rebirth of direct democracy is finding more and more fertile ground and greater application in the twenty-first century. Examples are the Swiss cantons, Uruguay, New Zealand, the state of Bavaria in Germany and the state of California in the USA,2 while in 19 out of the 50 US states, a modern version

316 Epilogue of euthyna (recall) is carried out, for example, for cases of corruption. These states include Alaska, Arizona, California, Colorado, Georgia, Idaho, Illinois, Kansas, Louisiana, Michigan, Minnesota, Montana, Nevada, New Jersey, North Dakota, Oregon, Rhode Island, Washington and Wisconsin. It is believed that the recall procedure will be extended to more US states in the coming years. This procedure is related to the quality of democratic governance. Recall petitions can range from disagreements over policy to malfeasance or abuse of power.3 On the other hand, the argument supported by many is that in today’s democracies, due to their huge populations (e.g., the US with a population of about 329.5 million in 2020 or the European Union with a population of about 447 million in 2020), direct democracy is not possible. Due to space limitations, I cannot expand further on this, but the above citations in this chapter provide proposals, under various disciplines, as to why and how direct democracy could be feasible today.4 In support of this is the Athenian paradigm itself. In other words, when citizens are aware of their obligations to the state, have received a quality education as paideia and been provided with the proper information about the facts that they must judge and evaluate, then it is quite possible that they will make a sound judgment, even if they are not “guardians” under a Platonic perspective. In other words, under certain conditions, they can wisely select the right people, the “experts,” to transform their preferences and desires into action for the benefit of the whole society, such as Miltiades, Themistocles, Aristides, Cimon, Pericles, Eubulus, Lycurgus and Demosthenes. Using the bounded rationality concept, Kyriazis and Economou (2015a) and Economou and Kyriazis (2019, 2022) explained how this was achieved in practice in the political arena of Athens. Equally important is that every proposal introduced to the Athenian Assembly that was related, either directly or indirectly, to financial issues, had to have been fully costed in a convincing way. However, one must add that, unfortunately, demagogues sometimes emerged, such as Cleon, who harmed the state by leading the citizens to wrong decisions such as the expulsion of Themistocles in Persia, the death penalty for the experienced Athenian generals after the Naval Battle of Arginusae and the disastrous Sicilian Campaign. Another aspect in this discussion is the role of the media. It is confirmed that in modern democracies, media play a very crucial role in the correct or incorrect (e.g., fake news) information provided to the citizens. In the Athenian state, such means were the citizens’ Assembly, the Council, the courts, the theater – where citizens could be entertained and simultaneously be informed about political and social developments – as well as, of course, the Athenian agora. Returning to economic performance in Classical Athens, the successful response to the external Persian threat proved the system’s ability to respond effectively, followed by the “turn to the sea” strategy introduced by the visionary Themistocles, which led to the gradual transformation of society from an “introverted” (rural) to an “extroverted” (merchant-naval oriented) one. Such a transformation led to economic growth in the long run, as also happened with the United Provinces and England, after the sixteenth century AD, among other historical cases.

Epilogue  317 The new naval culture was established, both as a projection of military power and as a means of stimulating trade. In the case of Athens, the coupling of military to economic power is confirmed in practice, as has already been argued throughout the book. In contrast to the Eastern monarchies, such as the Persian Empire, in which economic policy was largely based on the oppressive exploitation of slaves and subjectification of peoples, the Greek world, since the Classical period and onward, gradually introduced the basic principles of a free market economy and private initiative. This is not to deny that slaves were still contributing and producing an important portion of wealth in Athens during Classical times. Through the “turn to the sea” strategy, the largest part of the annual Athenian gross domestic product (GDP) should be attributed to free citizens, slaves, metics and foreigners temporarily working in Athens who were engaged on maritime economy, “international” commerce (throughout Eastern Mediterranean, the Balkans and the Black Sea) and financial services (Halkos and Kyriazis 2010). Economic–financial innovations, such as the establishment of international trade protected by a strict set of rules and law and the adoption of the principles of good faith while performing trade agreements and transactions, were tantamount to an economic-institutional revolution that flourished and prevailed in Athens thanks to democracy. For example, Corinth also exercised economic institutions similar to those of Athens, yet it was an oligarchy (but not always). But it cannot be denied that the Athenian statecraft, based on a series of key institutions such as direct democracy, protection of property, market profitability through legal means, freedom of trade, a stable and fair tax system, low corruption phenomena, the strongest international currency and the development of investment-commercial activity that was backed up by a strong grid of efficient laws, characterized by speedy judicial procedures between litigants so that transactional costs remained low, were the safest foundations for the prosperity of financial institutions in Athens. In short, the Athenian state was an integrated model of economic democracy for its era, i.e., a successful grid of democracy and economic policymaking backed up by the rule of law (Kyriazis and Zouboulakis 2004; Patriquin 2015). This dual relationship is intertemporal (Economou and Kyriazis 2019). On this, Arrow (1950, 328) writes: In a capitalist democracy these are essentially two methods by which social choices can be made: voting typically used to make “political” decisions and the market mechanism, typically used to make “economic decisions.” Throughout this book, it has been argued that the superiority of a blend of institutions were the main qualitative element for the success of the polis organization in Classical Greece, in general, and of the Athenian polis, more specifically. Some of these key axioms that were implemented in practice in Classical Athens include:

• Establishment of functional and efficient democratic political institutions. • Democratic ethos in public life.

318 Epilogue

• Establishment of functional and efficient judicial institutions. • Implementing a “checks and balances system” regarding the separation of pow• • • • • • • • • •

• • • • •

ers (legislative, executive, judicial between the Assembly, the Council, the prytaneis and the courts – see Table 2.5 and Section 2.3). Establishing key institutions (such as property rights and commercial contracts protection and fair and fast judicial decisions to minimize transaction costs). Introducing mechanisms for the protection and smooth functioning of the market (such as the agoranomoi and metronomoi to combat profiteering). Innovative (for the era) institutions, such various applications of 3Ps, such as the liturgies and the TTAGs being QSIs, which functioned as banks which lent money to the state when needed. The development of a manufacturing and “secondary” sector of production (workshops, handicrafts, shipyards for the shipbuilding of both warships and merchant ships, carpentry, ironwork, dye houses, ship maintenance, etc.). Technological innovations. The development of financial services (banking services, insurance, mortgage lending, primitive versions of joint-stock companies (JSCs) etc.). Introduction of a highly reliable currency, the Athenian drachma, for effectively performing international financial transactions. Introducing laws (such as Nicophon’s Law) and monetary institutions (such as the argyramoiboi and, even more importantly, the dokimastai) to ensure the reliability of the currency. Efficient economic policy measures such as the provision for achieving balanced annual state budgets under a fiscal discipline logic. The provision that every proposal of a fiscal nature that came to the Assembly for decision should have been adequately costed, otherwise it was rejected. Ideally, proposals should be made by experts on a field (like Nicophon on monetary issues). Introduction of a fair taxation system. Provision of public goods and services. The introduction of efficient auditing mechanisms such as the logistai and the euthynoi for ensuring good governance and minimizing corruption in public administration. The establishment of effective social networks between citizens, metics, foreigners (mainly merchants) and slaves as mechanisms of sharing common protocols and codes of behavior with each other. Qualitative education (paideia) of the citizens through various means (schools, philosophers, the theater, the popular Assembly and the agora as “a marketplace of ideas” and a means to gain knowledge and a way for the creation of a climate of generalized morality within society).

The above axioms were met in the case of Classical Athens, to a larger or lesser extent. The same axioms are considered as pivotal for the success of an economy under the current structure of the world system, as a plethora of authors from various disciplines argue.5

Epilogue  319 As a final comment, this book has sought to contribute to the academic literature by highlighting the economic organization, the forms and the types of economic policies that shaped the relationship between the citizens and the state in Classical Athens as well as the bonds of cooperation between Athens with the other states in the Aegean, the Mediterranean, the Balkans and the Black Sea, with which they were in constant contact and communication. Democratic Athens during Classical times became the economic and geopolitical leader among its allies, just as the USA is today. This work has led to a series of conclusions that may open new research horizons. Various issues were identified and highlighted through the lens of an interdisciplinary approach. Some limitations of this analysis had to do with the absence of cliometric data, but I believe (and hope) that the synthesis of information that is provided in the book explains persuasively that the economic achievements of the Athenians and their polis should be mainly attributed to the superior combined set of institutions and economic policies that they introduced. This corresponds to the findings of modern institutional theory and New Institutional Economics in particular. Given the above, this book concludes here, aiming to become the main thematic core for further dialogue among researchers on related topics. I hope that the “research odyssey” presented in this book will benefit its readers. Notes 1 Regulatory capture refers to a form of corruption of authority that occurs when a political entity, policymaker, or regulator is co-opted to serve the commercial, ideological or political interests of a minor constituency, such as an ideological group at the expense of the welfare of society as a whole. This theoretical concept is a branch of public choice theory and is mostly related to the economics of regulation. See Stigler (1971) and Laffont and Tirole (1991), among others, on this. 2 A characteristic case of direct democracy procedures in decision-making in California was the famous case of Proposition 13 that was voted on June 6, 1978, by means of the initiative process (Economou et al. 2017). 3 https://ballotpedia​.org​/Recall_(political) 4 For an analytical discussion with arguments regarding the viability of introducing direct democracy mechanisms of governance and auditing mechanisms such as the recall procedure today, see Economou and Kyriazis (2019). See further the papers of G.C. Bitros, E.M.L. Economou and N.C Kyriazis, G. Tridimas and S. Vlachopoulos in the collective volume, Democracy in Times of Crises (Springer, 2022). 5 See among others: Commons (1924), Schumpeter (1934, 1939, [1942, 2013), Buchanan (1954a), Downs (1957), Hayek (1960, 1981), North and Thomas (1973), North (1981, 1990), Bowles and Gintis (1986), Levi (1988), Fukuyama (1995), Glaeser et al. (2004), Rodrik (2007), Bitros and Karayiannis (2013), Hodgson (2015), James (2015) and Economou and Kyriazis (2019).

Ancient Greek authors (Perseus Digital Library) Aeschines, Against Ctesiphon Lysias, Against Andocides, Plutarch, Ethics Thucydides, Histories (The Peloponnesian War)

320 Epilogue Modern authors Acemoglu, D., Robinson, J., (2013), Why Nations Fail, New York: Crown Business. Almond, G. A., Verba, S., ([1963], 1989), The Civic Culture: Political Attitudes and Democracy in Five Nations, London: Sage Publications. Arrow, K., (1950), ‘A difficulty in the concept of social welfare,’ The Journal of Political Economy, 58(4), 328–346. Arrow, K., ([1951], 1963), Social Choice and Individual Values, New Heaven: Yale University Press. Barber, B. R., (2003), Strong Democracy: Participatory Politics for a New Age, New York: MacMillan Press. Bitros, G. C., Karayiannis, A., (2010), ‘Morality, institutions and the wealth of nations: Some lessons from ancient Greece,’ European Journal of Political Economy, 26, 68–81. Bitros, G. C., Karayiannis, A., (2013), Creative Crisis in Democracy and Economy, Berlin, Heidelberg: Springer-Verlag. Bowles, S., Gintis, H., (1986), Democracy and Capitalism, New York: Basic Books. Buchanan, J. M., (1954a), ‘Social choice, democracy and free markets,’ Journal of Political Economy, 62, 114–123. Buchanan, J. M., (1954b), ‘Individual choice in voting and the market,’ Journal of Political Economy, 62(3), 114–123. Carugati, F., (2019), Creating a Constitution: Law, Democracy, and Growth in Ancient Athens, Princeton: Princeton University Press. Christ, R. M., (2006), The Bad Citizen in Classical Athens, Cambridge: Cambridge University Press. Commons, J. R., (1924), Legal Foundations of Capitalism, New York: Macmillan. Cronin, T. E., (1999), The Politics of Initiative, Referendum, and Recall, Cambridge, MA: Harvard University Press. Dewey, J., (1916), Democracy and Education: An Introduction to the Philosophy of Education, New York: Macmillan. Dewey, J., (1940), ‘Creative democracy – The task before us,‘ in Conference on Methods in Philosophy (Ed.), The Philosopher of the Common Man: Essays in Honor of John Dewey to Celebrate his Eightieth Birthday, New York: Putnam’s Sons, 220–228. Downs, A., (1957), An Economic Theory of Democracy, New York: Harper and Row. Economou, E. M. L., (2020), The Achaean Federation in Ancient Greece: History, Political and Economic Organisation, Warfare and Strategy, Cham: Springer. Economou, E. M. L., Κyriazis, N. C., (2019), Democracy and Economy: An Inseparable Relationship Since Ancient Times to Today, Newcastle upon Tyne: Cambridge Scholars Publishing. Economou, E. M. L., Kyriazis, N. C., (2022), ‘Asymmetric information, social choices and democracy,’ in E. M. L. Economou, N. C. Kyriazis, A. Platias (Eds.), Democracy in Times of Crises. Challenges, Problems and Policy Proposals for Today’s and Future Societies, Cham: Springer Verlag, 147–164. Economou, E. Μ. L., Kyriazis, N. C., Metaxas, T., (2017), ‘Ancient Athenians, Californians and modern Greeks: A comparative analysis of choice set under direct democracy procedures,’ Homo Oeconomicus, 34, 47–65. Feld, P. L., Savioz, M. R., (1997), ‘Direct democracy matters for economic performance: An empirical investigation,’ Kyklos, 50, 507–538. Fishkin, J. S., (2011), When the People Speak: Deliberative Democracy and Public Consultation, Oxford: Oxford University Press.

Epilogue  321 Fröhlich, P., (2013), ‘Governmental checks and balances,’ in H. Beck (Ed.), A Companion to Ancient Greek Government, Malden, MA: Willey-Blackwell, 252–266. Friedman, B. M., (2006), ‘The moral consequences of economic growth,’ Society, 43(2), 15–22. Friedman, M. ([1962], 2002), Capitalism and Freedom, Chicago: University of Chicago Press. Fukuyama, F., (1995), Trust: The Social Virtues and the Creation of Prosperity, New York: Free Press. Glaeser, E. L., La Porta, R., Lopez-de-Silanes, F., Shleifer, A., (2004), ‘Do institutions cause growth?‘ Journal of Economic Growth, 9, 271–303. Halkos, G., Kyriazis, N. C., (2010), ‘The Athenian economy in the Age of Demosthenes,’ European Journal of Law and Economics, 29, 255–277. Hand, L., (1952), The Spirit of Liberty: Papers and Addresses of Learned, ‎New York: Alfred A. Knopf. Hayek, F. A., (1960), The Constitution of Liberty, Chicago: University of Chicago Press. Hayek, F. A., (1981), Law Legislation and Liberty. Rules and Order, Vol. 3, Chicago: University of Chicago Press. Hodgson, G. M., (2015), Conceptualizing Capitalism: Institutions, Evolution, Future, Chicago: University of Chicago Press. James, Jr., H. S., (2015), ‘Generalized morality, institutions and economic growth, and the intermediating role of generalized trust,’ Kyklos, 68(2), 165–196. Jones, C., Hesterly, W. S., Borgatti, S. P., (1997), ‘A general theory of network governance: Exchange conditions and social mechanisms,’ Academy of Management Review, 22(4), 911–945. Kyriazis, N. C., (2012), Why Ancient Greece, Athens: Psychogios Publications. Kyriazis, N. C., Zouboulakis, M., (2004), ‘Democracy, sea power and institutional change: An economic analysis of the Athenian naval law,’ European Journal of Law and Economics, 17, 117–132. Kyriazis, N. C., Economou, E. M. L., (2015a), ‘Macroculture, sports and democracy in Classical Greece,’ European Journal of Law and Economics, 40, 431–455. Kyriazis, N. C., Economou, E. M. L., (2015b), ‘Democracy and education: A history from ancient Athens,’ in J. Backhaus (Ed.), The University According to Humboldt. History, Policy, and Future Possibilities, Heidelberg: Springer Verlag, 75–84. Laffont, J. J., Tirole, J., (1991), ‘The politics of government decision making: A theory of regulatory capture,’ Quarterly Journal of Economics, 106(4), 1089–1127. Levi, M., (1988), Of Rule and Revenue, Berkeley, Los Angeles, CA: University of California Press. Lyttkens, C. H., (1994), ‘A predatory democracy: An essay on taxation in classical Athens,’ Explorations in Economic History, 31, 62–90. Lyttkens, C. H., (2010), ‘Institutions, taxation, and market relationships in ancient Athens,’ Journal of Institutional Economics, 6(4), 505–527. Lyttkens, C. H., (2011), ‘Health, economics and ancient Greek medicine,’ The Journal of Economic Asymmetries,’ 8(1), 165–192. Manville, B., Ober, J., (2003), A Company of Citizens, Boston, MA: Harvard Business School Press. Matsusaka, G. J., (2005a), ‘Direct democracy works,’ The Journal of Economic Perspectives, 19(2), 185–206. Matsusaka, G. J., (2005), ‘The eclipse of legislatures: Direct democracy in the 21st century,’ Public Choice, 124, 157–177.

322 Epilogue Mauro, P., (1995), ‘Corruption and growth,’ The Quarterly Journal of Economics, 110(3), 681–712. Michels, R., (1915), Political Parties: A Sociological Study of the Oligarchical Tendencies of Modern Democracy, New York: The Free Press. North, D. C., (1981), Structure and Change in Economic History, New York: W.W. Norton and Company. North, D. C., (1990), Institutions, Institutional Change and Economic Performance, Cambridge: Cambridge University Press. North, D. C., Thomas, R. P., (1973), The Rise of the Western World: A New Economic History, Cambridge: Cambridge University Press. North, D. C., Wallis, J. J., Weingast, B. R., (2009), Violence and Social Orders. A Conceptual Framework for Interpreting Recorded. Human History, Cambridge: Cambridge University Press. North, D. C., Weingast, B., (1989), ‘Constitutions and commitment: The evolution of institutional governing public choice in seventeenth-century England,’ The Journal of Economic History, 49(4), 803–832. Ober, J., (2008), Democracy and Knowledge. Innovation and Learning in Classical Athens, Princeton: Princeton University Press. Ober, J., (2010), ‘Wealthy Hellas,’ Transactions of the American Philological Association, 140, 241–86. Ober, J., (2011), ‘Wealthy Hellas,’ Journal of Economic Asymmetries, 8(1), 1–39. Ober, J., (2015a), The Rise and the Fall of Classical Greece, Princeton, NJ: Princeton University Press. Ober, J., (2015b), ‘Classical Athens,’ in A. Monson, W. Scheidel (Eds.), Fiscal Regimes and the Political Economy of Premodern States, Cambridge: Cambridge University Press, 492–592. Patriquin, L., (2015), Economic Equality and Direct Democracy in Ancient Athens, Basingstoke, Hampshire: Palgrave MacMillan. Pritchard, D. M., (2014), ‘The public payment of magistrates in fourth-century Athens,’ GRBS, 54, 1–16. Putnam, R., (1993), Making Democracy Work, Princeton: Princeton University Press. Rodrik, D., (2007), One Economics. Many Recipes. Globalization, Institutions and Economic Growth, Princeton, Oxford: Princeton University Press. Schumpeter, J. A., (1934), The Theory of Economic Development. An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle, Cambridge, MA: Harvard University Press. Schumpeter, J. A., (1939), Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process, Vol. 1, New York: McGraw-Hill. Schumpeter, J. A., ([1942], 2013), Capitalism, Socialism and Democracy, London: Routledge. Stigler, G., (1971), ‘The theory of economic regulation,’ The Bell Journal of Economics and Management Science, 2(1), 3–21. Tirole, J., (2017), Economics for the Common Good, Princeton: Princeton University Press. Tridimas, G., (2022), ‘Religion without doctrine or clergy: The case of Ancient Greece,’ Journal of Institutional Economics, 18(4), 677–691.

Glossary of Greek terms

Agora:  The political and economic center of the city; a large open area where commercial transactions were taking place (pl. agorai). Agoranomia:  “Market police”: A state service responsible for protecting ­consumers from profiteering. The magistrates who undertook this task were called agoranomoi (sing. agoranomos). Agronomoi:  magistrates responsible for the care and supervision of rural areas. Anagrapheus:  (“Scriber”): A magistrate who was assisting the Council in drafting and recording decrees. Anasaximon:  A mine that could be re-used. If the mine was abandoned or left for more than a year and then brought back into operation, it was reclassified as palaion anasaximon (a mine that once was anasaximon). Antidosis:  A process where any Athenian who was charged with undertaking a costly liturgy such as trierarchy could potentially avoid it by nominating a potentially richer man to perform it. Aparchai:  The remittances that the Allied Fund (AF) received from the allied city-states of Athens. Apeleutheroi:  Freed citizens (sing. apeleutheros). Apodektai:  The staff of the Demosion that supervised the collection of a series of remittances. They replaced the kolakretai who had similar duties till the Cleisthenes’ reforms. Similar to the duties of the apodektai were those of the praktores. The latter kept lists of all debtors to the state and may have participated in collecting the debts. Archai:  The total number of public services and their staff. Architektones epi tas naus:  They were in charge of the shipbuilding of the triremes. Architheoria:  Expenses to cover the mission of consuls outside Athens. Archon:  The highest political post in Archaic Athens. The post continued to exist during the Classical period with reduced duties. There were nine archons, and the highest in authority among them was called eponymous archon. Areiopagos:  the “Supreme Court” of the polis, functioned as the seat of the aristocratic political council during the Archaic period. During Classical times, its duties were restricted to adjudicating cases of deliberate homicide, wounding and religious matters. Argyramoiboi:  Moneychangers (sing., argyramoibos).

324  Glossary of Greek terms Argyrocopeion:  The Athenian silver mint. Its administrators–supervisors were known as the ten epistatai tou argyrocopeiou plus their secretary. Its staff consisted of slaves. Arrephoria: A liturgy in organizing processions carrying the veil of the goddess Athena. Asclepieia:  Large medical care centers (sing. asclepieion). Asphaleia:  Bilateral agreements which ensured the safe transfer of people and products (mostly by sea) and the prohibition to seize their property. Astynomoi:  Public magistrates responsible for maintaining order and cleaning of the polis. Asylia:  Exemption from reprisals due to the practice of sylis, meaning that legal implementation of reprisals against another polis. Ateleia:  Tax exemption. The person enjoying it was called ateles (pl. ateleis). Atimos:  Dishonored or deprived of civic rights. Condemned for embezzlement, bribery or other corrupt offenses. The characterization is related to atimia (dishonesty). Autopoles:  A merchant who sold goods which he/she produced himself/herself. Boonai:  A board of magistrates elected by show of hands with a duty to buy sacrificial animals for great festivals such as Panathenaia. Boule:  The Athenian Council of the Five Hundred. The councilmen were called bouleutai (pl. bouleutes). Bouleuterion:  The building where councilmen were housed and their daily meetings were taking place. Chalkoi:  Very small-value bronze coins (sing. chalkos). Cheirotonoi:  Public magistrates elected (by show of hands) to staff a series of specific state posts, by majority voting instead of being elected by lot. Chrematistike:  Economic activity for profit making. Choregia:  A type of liturgy (in pl. choregiai). The choregos (sponsor – in pl. choregoi) undertook the cost of equipping, training and staging a theatrical performance. Didrachm:  Two drachmae. Diobol:  Two obols. A subdivision of a drachma. Decadrachm:  10 drachmae. Deigma:  a place where samples of goods for sale were on exhibit in the port of Piraeus. Demarchs:  The Athenian mayors in each of the 139 demes of Athens. Deme:  municipality (pl. demes). The urban demes of Athens were known as the asty area, as opposed to the inland (mesogeia) and coastal (paralia). Demos:  The citizens of Athens. Demosioi:  public magistrates who were assisting the poletai in their duties. Demosion:  A state fund which gathered and collected a large portion of the annual state’s revenues. Desmoterion:  Athenian prison. Dikai emporikai:  Trials for commercial – economic cases only. Cases were heard by specialized and experienced judges. They were also related to nautodikai

Glossary of Greek terms  325 (maritime jurors) and xenodikai (literally meaning, jurors for foreigners). Dike apostasiou:  Trials to those metics who failed to secure a citizen as a “protector” (known as prostates) of them and their families. Dioikesis:  The process to achieve efficient financial administration of the state budget. Dokimasia:  A process of evaluating one’s candidacy for becoming a councilman. Rejection of a candidate was known as apodokimasia. Dokimastai:  Coin testers who had a bench in the agora of Athens and at the harbor of Piraeus and examined foreign currencies against fraudulence. They were under strict supervision by a body known as the syllogeis (collectors). Drachma:  The Athenian currency unit (pl. drachmae). Ecclesia (of the Demos):  The popular Assembly of citizens. When a very important assembly was taking place, it was known as ecclesia kyria. Extra (irregular) assemblies taking place within the year were known as synkletoi or ecclesiai synkletoi. Ecclesiastikon:  State remuneration (half a drachma) to the citizens to motivate them to actively participate in the workings of the Assembly. Eisangelia:  A legal procedure where any citizen could accuse any office holder for not correctly fulfilling his task as a public magistrate or abusing his position or acting against the public good or democracy, or being corrupted, etc. Eisphora:  An extraordinary tax on property raised at Athens in wartime only, paid by both wealthy citizens and metics (pl. eisphorai). Emporoi:  Merchants (sing. emporos). Enktesis:  The right of holding land property in Athens, granted as a reward to foreigners. Enktetikon:  A small tax to the citizens at the deme level based on property and income criteria. Ephebeia:  Military training and duty. The trainees were young 18–19 years of age. Epidosis:  A formal appeal by the polis authorities to their citizens to come forth and donate money to the state when in need. Epikleroi:  Athenian women controlled their husband’s lot when he died till their male offspring became adults (sing. epikleros). Epimeletai ton neorion/neoroi:  Public magistrates who supervised the shipyards of neorion (in the military port of Piraeus). Epimeletai tou emporiou:  A group of magistrates responsible to oversaw the warehouses of imported commodities in general, and of grains in particular, in the port of Piraeus. They also examined accusations of potential profiteering by the sitemporoi (merchants of grains) known also as sitopolai (sellers of grain). Epimeletes epi ton hydaton and ton krenon:  A magistrate with the duty to supervise the distribution of water in the polis and the cleanliness of the springs. Epiphorai:  An additional salary which was given by the trierarchs (at their own expense) in order to please their crew and thus ensure its trust and cooperation. Epistatai:  Administrators–supervisors of various state posts such as temples. An

326  Glossary of Greek terms important post was the epistatai tou argyrocopeiou being the administrators– supervisors of the silver mint. Epistates:  (i) A “president” of the prytanic council elected by them. (ii) Caretaker of a household or a gymnasium. Ergasterion:  A workshop or construction site (pl. ergasteria). Eunomia:  “good order,” governance according to good laws. Euthyna:  A special accountability procedure for every public magistrate. The board of those magistrates was known as the euthynoi (sing. euthynos). Glauce:  Literally meaning “owl,” it was another name for the Athenian drachma (glaucai in pl.). Grammateidion:  A small tablet bearing a document. It could be a contract or any notes, memos, etc. Grammatists:  Elementary school teachers who were teaching courses related to grammar (writing, reading) and maths. Graphe paranomon:  A law provision where every citizen had the right to accuse a boulomenos who proposed a psephisma (decree) or managed to already pass a psephisma (accepted and voted by the Assembly), which, according to the accuser, contradicted the existing laws of the state or that it was accepted as a state law even though the correct legal procedures were not followed. Gymnasia:  (e.g., gymnasium). Large public athletic facilities. Each was supervised by a magistrate called the epistates. Gynaikonites:  women’s apartments in a house. Heliaia:  The popular court of Athens during the Classical period. Heliastic dikasterion:  Court of Heliaia. The jurors were known as heliastai. Hellenotamiai:  A group of ten public treasurers, being the chief financial officers of the Athenian Alliance. They were appointed by the Athenians (one from each tribe) to handle the financial contributions from the allied states. Hemidrachm:  Half a drachma. Hestiasis: A liturgy regarding the provision of meals in festive events. Hetaira (pl. hetairai):  They were somewhat similar to the Japanese geishas, or French courtisanes of the 16th–17th centuries. Hieron episkeuastai:  A group of magistrates responsible for the repairing of temples and sacred buildings. Hieropoioi:  Boards of magistrates who prepared, supervised and superintend religious festivals and were empowered to impose minor fines. Hippotrophia:  A type of liturgy. The citizen in charge was responsible for raising horses either for the army or intended for important celebrations and races. Homonoia:  Same-mindedness among citizens. Hoplites:  Heavy infantry citizen militia army. Isegoria:  Right to speak freely. Also, the right of every citizen to speak and make proposals in the Assembly. Isokrateia:  All state posts to be open to all citizens who wanted to participate in their staffing. Isonomia:  Equality before the law. It meant also equality of political rights for all Athenian citizens.

Glossary of Greek terms  327 Isopoliteia:  A treaty of equal citizenship rights between states of the Classical but (mainly) Hellenistic period. Kalos-kagathos:  The proper behavior for one, to be considered a morally and physically attractive man (pl. kaloi-kagathoi). Kapelos:  A merchant who bought goods from an autopoles and then distributed them in the local area. Female vendors known as kapelis are attested as well. Kitharistai:  Guitarists who taught their elementary-level students how to play the lyre and sing the works of lyric poets. Koinonia:  Society. Koinonos (in pl., koinonoi):  Bank partners who created a common pool for (mainly) maritime lending. They could be co-owners with different corporate shares in a primitive version of a JSC, known as koinoniae chrematon (meaning “money partnerships”). Koprologoi:  a body of private scavengers who acted as public sweepers and were under the direct supervision of the astynomoi. Kybernetes:  (i) The person in charge of a trireme’s navigation. He was operating the rudder. (ii) The captain of a merchant vessel. Kyrios:  The head of the household who was responsible for his wife, children, and any unmarried female relatives. Also known as a woman’s “guardian.” Lexiarchoi:  A board of six magistrates who, in cooperation with the thirty syllogeis of the demos, had to check if those who were participating in the popular Assembly gatherings were true citizens, known as epitimoi. Liturgies:  A special type of taxation burdening only wealthy citizens and metics. It included trierarchy, choregia, hestiasis, gymnasiarchy and hippotrophia. Logistai:  Literally meaning, the accountants, this 10-member group, supervised any public magistrate of the state upon completion of his duty. They were also responsible to audit the magistrates of the treasury temples. In their duties they were assisted by the ten synegoroi. Medimnos:  A container that functioned as a unit of measurement mainly for agricultural products such as corn (pl. medimnoi). Merismos:  Collection, allocation, management and channeling of the public revenues to various state services (archai) so as to efficiently implement public policy by covering the costs for the provision of various public goods. The whole procedure was regulated by law and supervised by the Council. Metaboleus:  A retailer or peddler who sold products in very small quantities within a limited region. Metics:  Alien residents of Athens. They relocated to Athens for work purposes (sing. metic). Metoikion:  A personal tax on metics (alien residents), both men and women. Metronomoi:  Magistrates whose duty was to check if sellers invoiced their goods by using the correct weights and measures in the market. Metroon:  A temple dedicated to the goddess-mother, being also the building where the archives of the written laws of the state were stored. It was also known as nomophylakion. Misthos:  salary/wage.

328  Glossary of Greek terms Naukleroi:  Merchants who were affluent enough to own a vessel were also captains of merchant ships (sing: naukleros). Naukrariai:  An Archaic period system of both collecting taxes at the municipality level and at the same time of funding warships and cavalry for the Athenian state. The person in charge of the naukraria (sing.) was called naukraros (pl. naukraroi). Naupegeia:  shipyards. Naupegos:  Literally meaning shipbuilder: He was in charge of the technical issues of the boat, including repairs when required (pl.. naupegoi). Naustathmos:  A large dockyard for either warships or commercial ships (pl. naustathnoi). Neosoikos: A trireme’s shipshed (pl. neosoikoi). Nike:  Victory. Nine Archons:  The highest magistrates of Athens. They were: the eponymous archon, the archon basileus, the polemarchos, and the six thesmothetai. Nomisma:  Currency (pl. nomismata). Nomismatokopeion:  The Athenian mint which cut bronze coins. Nomophylakes:  Public magistrates responsible for the protection of legal documents from destruction and forgery. For this purpose they had full access to the Metroon. Nomos:  Law (pl. nomoi). Nomothetai:  Annual group of judges aimed to oversee whether there were duplications, contradictions or ambiguities between the laws in force or whether in the legal system there were still laws that were not actually used in practice. Obol:  A subdivision of the drachma (one-sixth of a drachma). Oikonomia:  House management but, in a wider sense, also the proper economic management of the state. Oikonomos:  (i) Household manager; (ii) Whoever was responsible for the treasury or finances of a city or a kingdom. Oikos:  (i) House, dwelling place; (ii) household. Opisthodomos:  The conventional name for the backyard of the Temple of Athena on the Acropolis where the chambers that hosted the treasuries of TTAGs and the AF were located. Paideia:  Upbringing and educating children. Aside from education paideia comprised a whole range of arrangements that aimed at shaping the moral character of youth from early childhood to adolescence. Palinkapelos:  A trader who buys from an emporos and resells in the vicinity. Paidotribai:  Elementary school teachers responsible for the physical body development of the kids. Palaistra:  A sporting wrestling school. Pantopoleia:  Grocery store (sing. pantopoleion) Parrhesia:  To speak the truth at any personal cost. Pentacosiomedimnoi:  Those having an annual income of 500 medimnoi. Penteconter:  A 50-oars type of warship mainly used in the Archaic period. Pentecoste:  A general tax on imports (2% tax on the value of the good). Tax

Glossary of Greek terms  329 collectors of this relative tax were called pentecostologoi. Other taxes on imports included: eicoste (5% tax), decate (10% tax), dodecate (12% tax, a grain-tax), hecatoste (1% tax), ellimenion, epibatikon and diapylion. Phalanx:  The most well-known and practiced military formation in Ancient Greece from the Archaic to Hellenistic times. Its members were called hoplites. Phoros:  It refers to the taxes that the city-states of the Athenian Alliance paid to the AF. This tribute concerned those members who paid in money instead of furnishing triremes. Poletai:  (Board of poletai). A group of public magistrates responsible for the leases of state land for exploitation by individuals or consortia through auctioning processes on behalf of the state. These leases included the highly profitable silver mines. Poletai and the Council were entrusted with the supervision of the whole procedure of these leases. Polis:  City-state (pl. poleis). Proxenos:  A kind of ambassador (pl. proxenoi). By becoming the proxenos of the Athenians, a foreigner was expected to assist Athenians who visited his own polis. Proxeny:  A measure (mostly) for traders who travelled to other Greek poleis, to protect them from the risk of having themselves or their property seized. Proxeny could also be bestowed on metics. Prytany:  (also known as prytaneia). The executive branch of the Council. Each prytany consisted of 50 councilmen who were originating from the same Athenian tribe, known as prytaneis. About one-tenth of the year, each of the ten phylae (tribes) presided in turn over the Council and the Assembly through a prytany. Prytaneion:  (also known as Tholos). A luxurious and expensive government building where the prytaneis exercised their duties and dined with other highranking officials and foreign dignitaries. Psephismata:  Decisions taken in the Assembly in the form of decrees and remained in force until revised or replaced by other decrees or laws (sing. psephisma). Quadriremes:  An evolution of the trireme. They were larger ships with four levels of oars. A further evolution was the quinquereme with five levels of oars. Schole:  Leisure. Stelae:  Stele. Sitophylakes:  A body of magistrates who were responsible to guard the wheat warehouses. Five of them were located in Athens and five in the twin city of Piraeus. They had similar duties with the sitonai. Strategoi:  Literally meaning generals and standing for the highest military commanders of Athens (sing. strategos). They gathered altogether in a specific place located in the agora, known as the Strategeion. They were given specific assignments, such as the strategos epi tin choran for the defense of Attica. Stratiotikon:  It was a forth c. BCE fund, responsible for the military expenditures of the state. It had a treasurer in charge known as tamias epi ton stratiotikon. Symbola (in sing.:  symbolon): Permanent bilateral treaties, introduced during the

330  Glossary of Greek terms fifth c. BCE, created to regulate litigation between citizens of different states providing each party with a form of protection that was similar to asylia. Symmories (also symmoriai – sing., symmoria):  Distinct taxation groups of wealthy citizens being liable (i) to pay the eisphora war tax and (ii) to cover the expenses of the trierarchy. Syngraphe:  Written agreement, such as a loan. Syntrierarchy:  Joint trierarchy. Talent:  The largest denomination of drachma. A talent was equal to 6,000 drachmae. Tamia:  Treasuries. Tamiai:  (sing. tamias) Treasurers of the TTAGs and other money-managing authorities. They collected funds, paid bills, overlooked the operations of their institutions and reported to higher authorities for reasons of accountability and transparency. Tamias ton koinon prosodon:  Also known as epimeletes tes koines prosodou, or tamias epi tes dioikeseos, he was responsible for the overall supervision of the system of collecting and dispensing public revenues and reporting to the Assembly. To carry out his coordinative duties, he was assisted by the poristai, a body of civil servants who were involved in handling the public revenues. Telonai:  Tax collectors (sing. telones). The customs office was known as Teloneion. Its chief was known as telones or telonarches. Tetradrachm:  Four drachmae. Tetrobol: Four obols. Theorika:  Monetary compensation of two obols provided by the state to citizens for the purpose of attending theatrical performances financed by a liturgy known as choregia under the auspice of the state. Theorikon:  The fourth-century fund which was responsible for the theorika payments. It had a treasurer in charge known as tamias epi ton theorikon. He was assisted in his duties by ten magistrates (hoi epi to theorikon). Thirty logistai:  A fifth-century institution. This group assessed any public magistrate upon completion of his duty. It appears that in the fourth century BCE, there were three separate groups of logistai (such as the ten logistai) with similar yet different and distinct duties. Thetes:  The lowest-income social group according to the reforms of Solon. Thesmothetai:  A board of six archons whose duties were to review the laws annually, to determine whether there were inconsistencies, duplications or invalid laws in force and, if so, to inform the nomothetai to rectify the situation. Trapezitai:  Bankers in Athens and elsewhere. Treasuries-Temples of Athena and the Other Gods (TTAGs):  Quasi-state institutions, functioning as banks which mainly leased the state when in need. Triacosiomedimnoi:  Known also as hippeis. Those having an annual income 300 medimnoi, which enabled them to purchase, breed and maintain a horse, known as hippos. Trierarch:  The commander of a trireme warship. Trierarchy:  The most expensive type of liturgy where both wealthy Athenians

Glossary of Greek terms  331 and metics were charged with the running expenses of a trireme warship for one year. Trieropoioi:  Committee of ten men responsible for the construction and the supervision of the Athenian trireme shipbuilding programs. Trireme:  A Greek warship which was rowed by three banks of rowers on each side. The rowers were divided according to their positions in the ship into thranitai, zygitai and thalamitai (known also as thalamioi). The crew consisted of the following crew members: trierarch, kybernetes, keleustes, prorates, pentecontarchos, naupegos and trieraules. Xenikon:  A specific tax paid by foreigners only.

Index

accountability 249 administration: common 184; financial 240, 262; good 186; government 40; public 37, 40, 42 agora 40, 99–104, 108 agoranomia 110–111, 291 agoranomoi 109–111, 238, 318 agricultural: production 2, 62, 142; sector 281 anasaximon 206; palaion 206 antidosis 67, 72–73, 210 aparchai 180–181, 183, 185 apeleutheros 149 apodektai 178, 187, 238 archai 178, 187, 236 Areiopagos 28, 34, 37 argyramoiboi 168, 222, 318 Aristocratic: class 114; faction 31, 59; families 29, 55, 71 asphaleia 131, 133, 135 assembly: gatherings 31, 37; meeting(s) 26, 30, 248; municipal 36; popular 37, 42, 135; workings of the 248 astynomoi 238, 246, 284 asylia 131–133, 135 Athenian: Agora 909, 101, 103; alliance 4, 26, 73; banking system 162, 163, 166; banks 13, 70; citizens 3, 10, 28; currency 203, 213–215; democracy 15, 20, 28; drachma 172, 197, 199; economy 1, 3, 12; glauce 215 Athens: Classical 1–5, 10, 13; during Classical times 309; fourth century 303 atimia 35, 90, 237 atimos 39–40, 251, 313 auditing: duties 40, 251; institutions 248, 250, 252; mechanisms 249, 318–319; procedure 183, 250 bank: Central 208, 212, 229, 230; deposits 166, 267; shareholder 172

banking: activities 113, 146, 150; intermediation 163; services 11–13, 18–19, 103; system 162–163, 166–167; transactions 169 Bouleuterion 33, 42, 99 budget: annual 211, 243, 253; Athenian state 181, 253–257, 296; balanced 256; household 137; surpluses 186, 256 business: behavior 10; cycle 106; partners 259; plans 163; renting a 139; risk 209; strategies 125 cheirotonoi 239 choregia 68, 265–266, 293 choregoi 181, 242, 265 Coinage Decree 222–225 coins: Athenian 163, 210, 218; bad or counterfeit 216, 217; bronze 199–200, 202, 212; counterfeit 18, 215–217; electrum 222, 229; federal 219; foreign 215–216, 218; gold 204, 230; minting of 223; struck 197, 225 collective: decision 210; interest 312; prosperity 278; responsibility 132 commercial: action 195; activity 91, 93–94, 110; agreements 134, 172; banks 212; contracts 1, 90, 92; law 170; orientation 13, 204; practices 122, 140; representatives 162; transactions 9, 21, 104; treaties 130–131, 133 companies: limited liability 171; multinational 125, 139 competition: currency 222; fair 137; market 111 constitutional: reforms 68 cooperation: interstate 135; networks of 213 cost(s): information 23; transaction 88, 94, 111 council: Athenian 175, 214–215, 217; of the Five Hundred 30, 32, 37; of the Four Hundred 28–29, 42

Index  333 court(s): maritime 94; Supreme 43 Credible commitment 88, 189, 312 credit: banks 183, 187; consumer 163, 166; sales 166 currencies: digital 116, 212 currency: Athenian 203, 214–216, 222; bronze 201, 213; competition 222; debasement 217; divisibility 199; intrinsic value 195, 213–215; leading international 214; local 213; national 203, 215; production 18, 205, 206; reliable 171–172, 318; subdivisions 203; universal 80, 217 debt(s): abolishment 27; private 91; repayment 189, 256 defense: expenditures 253, 255, 296; national 68, 290; public good 26, 40, 243; strategy 180 deficit: to GDP ratio 255 Delian League 4, 20, 77 demand and supply: forces of 104, 123, 295; laws of 112; mechanism 104 deme 29, 36, 42 democracy: Athenian 15, 20, 28; direct 1, 32, 210; parliamentary 28; restoration of 26, 37, 236; school of 57 democratic: federal states 219; governments 181, 256; macroculture 25 demos 36, 38–39, 60; Athenian 60, 69, 248; Ecclesia of 29–30 Demosion 177–179, 181, 187 dioikesis 240, 260–262 division of labor 9, 17, 25 dokimasia 33, 41, 249 dokimastai 217–222, 318 drachma 37, 39–40, 43 drachmae 37–38, 43, 58 duties: custom 58, 106, 115; harbor 257 ecclesiastikon 26, 37–38, 211 economic: development 38, 41, 71; equality 14; freedom 134–135, 227, 309; growth 6, 12–14, 22; institutions 1, 3, 6; organization 1–2, 4, 11; polic(y/ies) 1, 3, 5; rationality 10–11, 19 economy: Ancient Greek 2–4, 9, 11; Athenian 1, 3, 12; free market 20, 28, 32; local 74, 283 eisangelia 41, 252–253 eisphora 69, 240–241, 257, 258 emporoi 114, 130, 152 emporos 115, 140 England 4, 6, 24

enktesis 131, 133, 135 entrepreneurship: women’s 146 ephebeia 31, 242, 255 epimeletes tes koines prosodou 239, 243, 261 epimelitai tou emporiou 115 epistatai 183, 187, 206 eponymous archon 34, 91–92, 274 equality: economic 14, 267; political 24, 57, 239 ergasimon 205 ergasteria 124–129 ergasterion 126–130, 139, 177 European Union 6, 24, 111 euthynoi 238, 244, 250 externalities 293 financial: administration 240, 262; crisis 2, 165, 189; experts 211; institutions 18, 95, 166; pool 163; resources 40, 162, 183; services 62, 168, 212; system 13, 95, 110; transactions 167, 172, 213 fiscal: discipline 212, 255–256, 318; (expansionary) policy 66–67; rules 256 formalist: approaches 13; views 10 free market: economy 20, 28, 32; institutions 95 fund: Allied/Delos 73, 180; demosion 177; Stratiotikon 243 goods: public 1, 59, 68 Graphe paranomon 39, 41, 43 Growth: economic 6, 12–14, 22; longterm 67 guarantee: cargo as a 169; personal 163 gymnasia 266, 284, 291 Heliaia 29, 33–35, 37 Hellenotamiai 180–181, 186–187, 238 historical anachronism 2, 19–21, 130 homonoia 243, 310, 314 hoplites 29, 40, 57 income: class(es) 140, 147, 236; growth 67; inequality 28, 266; low-/lower 30, 57, 140, 147; medium 58, 60; middle-294, 314 innovative: (economic) institutions 80, 93, 318; methods of production 66; products 128; services 314 institutional: change(s) 15, 21, 22; framework 16, 23, 25; structure 311 institutions: financial 18, 95, 116; judicial 34, 318; political and economic 135, 285

334 Index insurance: health 303; personal 303; services 1, 18, 93 interest rate(s): high 164–165; low(er) 163 isokrateia 31, 239, 313 isonomia 30, 32, 95 isopoliteia 131–133, 135, 227 judicial: system 39, 43, 94; powers 34 kalos kagathos 242–243, 301, 314 klerotoi 239 koinoniae chrematon 176 koinonos 171–173 kolakretai 178, 187, 238 kollybistai 168 labor: division of 9, 17, 25; force 64, 126, 137; motivation 125; specialization 138 law: Court 95; Nicophon’s 213, 215–219, 318; protective 216 lease(s): land 82, 91, 164; the mines of Laurion 241; state and sacred lands 241, 262 liturgies 67, 71–72, 82 loan(s): consumer 165; for consumption 163; for investment 165; maritime 162–164, 169, 171 logistai 188, 238, 244 management: economic 247; household 18, 136; human resource 137; of public assets 34, 240; public money 31, 249, 250; waste 284; water 245 maritime: commerce 13, 20, 64; economy 25, 54, 65; infrastructure 54, 63–64; sector 58; trade networks 131 market(s): Athenian 66–67, 99, 108; competition 111; economy 12, 17, 20; forces 104–105, 126, 211; foreign 10, 215; freedom 5; inspections 109; international 123, 214, 229; manipulation 110; mechanisms 21, 112; regional 175; specialization 123, 125; transactions 2, 100 medimnoi 28–29, 42, 93 metics 5, 40, 43 metoikion 106, 257–259 metronomoi 109, 111, 238 military: equipment 101, 127; expenditures 107, 243, 299; innovations 73; operations 73, 186; service 31, 60, 70; strategy 78 mint: silver 200, 204 misthos 178, 236, 259 modernist 9–10, 13–14

monetary: circulation 9, 195, 203; policy 18, 205, 210; system 11, 215; union 222, 224–225, 227 money: changers 221; commodity 195, 214; concealment of 267; fiat 195, 212; multiplier 212; quantity of 213; sound 134; supply 210–213 naukrariai 54–55, 68 naupegeia 65, 70 naupegoi 65, 70, 82 naustathmoi 65 nautodikai 94, 135, 238 naval: battle 26, 61, 64; ceilings 79; power 58, 76, 79; program 55, 59, 62 negative externality 95 neosoikoi 65, 116–119, 246 network: commercial 169; governance 104; trading 226 nine archons 40, 54 nomisma 195 nomismatocopeion 201 nomothetai 34, 41 obol 37, 107, 113 oikonomos 137–138 oikos 18, 89, 136 Opisthodomos 92, 180, 184–188 organization: agricultural 14; banking 167; constitutional 120; economic 1, 2, 4 ousia: aphanes 71, 166; phanera 166 ownership: collective/communal/common 88; individual 89; legal 90, 95; state 54; of warships 55 paideia 299, 301, 315 parrhesia 32, 42, 57 path dependence: and institutional change 22; break of 28 pentecoste 115, 241, 258 period: Archaic 9, 13, 16; Classical 1, 4–5, 9; Early Modern Europe 189; Hellenistic 11, 16, 82; Homeric 9, 19, 25; Mycenaean 80, 130, 221; Roman 115, 227 phalanx 29, 42, 57, 107, 127, 147, 294, 312 Piraeus 40, 65, 74 poletai 91, 175–176, 178 political: equality 24, 57, 239; freedom 309; institutions 28, 36–37, 40; opponent 59; parties 239, 310; rights 13, 31–32, 39; system 6, 23, 29 primitivist: or the “modernist” 10; assertions 106

Index  335 private: consortia 175; consumption 59; mining contractors 241 probouleumata 32 product: quality of a 127; differentiation 126 production: agricultural 2, 62, 141; home/ domestic 2; mode of 9; scale of 10 profit(s): margin 105; maximization 12, 125; percentage of 176 property: possession 149; rights protection 1, 11, 14 protection: civic rights 24; commercial contracts 1, 90, 92; property rights 1, 11, 14 prytaneis 32–33, 37, 39 prytany 31–32, 40, 91 public: administration 37, 40, 42; assemblies 100; choice 60, 81, 319; deficits 260, 262; duties 237; expenditures 1, 39, 178; funds 33, 119, 249; good(s) 1, 59, 68; interest 32, 241, 246; legal entities 182; magistrates 38, 188, 206; money 31, 90, 178; officials 34, 112, 237; -private partnership 1, 14, 55; revenues 26, 36, 106; sector 1, 11, 55; service 31, 68, 245; slaves 205, 217, 240; surplus(es) 260–262; treasury 179; works 26–27, 179, 205 rights: economic 93, 144; legitimate voting 30; property 1, 11, 14 risk: aversion 164; -taking by banks 165 rules: ethical 5; of conduct 23–24; formal 236; of the game 23, 236; set of 23, 135, 317 sector: agricultural 141, 281; maritime 58; private 68, 82, 177 shock therapy 28 sitophylakes 109, 111–112, 115 social: change and progress 6; position 59, 150; practices 23, 236; security 254, 303–304; unrest 28 society: Ancient Greek 16, 151; Athenian 1, 28, 57; face to face 31, 73, 103, 313; institutions of a 23; open access 24, 310 stater 225–226, 230 strategoi 35, 37, 40 strategy: commercially oriented 122; defense 180; military 78; peace or war 277; turn to the sea 61–62; war 26

Stratiotikon 179, 188, 238 symbola 131, 133–135, 227 symmories 40, 43, 69 synegoroi 238, 244, 250 talent 43, 68, 107 tamiai 92, 182–183, 185 tamias: epi to Stratiotikon 238; epi to Theorikon 238; tes koines prosodou 239, 243, 260; tois adynatois 246, 303 tax: collectors 115, 166, 264; evasion 71, 267; -farming 82, 264, 268; fraud 266 taxation: Athenian 263; direct type of 264; evade 163; exemption from 132; fairness of 266, 267; policy 14; progressive 263; shared 225; special type of 256; system 263, 267, 318 tetradrachm 197–198, 200, 213 theorika 211, 242–243, 260 Theorikon: and/or Stratiotikon funds 179, 239–240; treasurer managerof the Theorikon 277; treasury 243 thesmothetai 34, 238, 250 thetes 29–30, 42, 57 Tholos 33, 42, 101 timema 274 trade: balance 211; international (maritime) 71; intestate 120, 133, 135; long-distance 12, 17, 226–227; maritime 71, 93, 114; networks 131, 227; supervisors 109 Trapeza 189 trapezitai 168, 222 Treasuries-temples of Athena 92, 177, 182 Treasuries-temples of the other Gods 182 trierarch 55–56, 68–72, 246 trierarchy 35, 40, 67 trireme 26, 54–58, 61 United Provinces 6, 24, 57 USA 120, 135, 144 value: intrinsic 195, 213–215, 277; real 78, 183, 214 welfare: individual 63; social 14, 267, 290 women: limited rights of 145; occupations for 103; property of 145; social status of 13, 148, 151; suffrage for 14