The possible “capitalist” character of the ancient economy was a heavily discussed topic among German academics at the end of the nineteenth and beginning of the twentieth centuries. This was a time of industrialization, accompanied by a radical transformation not only of the organization of production but of the whole social organization. In the space of three generations between c. 1830 and 1900, a still predominantly rural society, where agriculture and craftsmanship provided the bulk of production, was wiped out and replaced by a predominantly urban world, where heavy industry and mass production for a market were dominant. Banks and factories structured the new economic and social landscape. Capitalism, or so it seemed, could be analyzed as the association on the one hand of a new financial system that was able to mobilize huge financial means and on the other hand of new techniques of production and organization oriented towards mass production, scientific progress being at the heart of the matter. This combination allowed a huge increase in the quantity of energy and production available per capita. It also challenged the traditional values and forms of social life of the old regime that had prevailed for centuries. In Europe, it was certainly in Germany that the transition to the new social system was the quickest. The breakthrough was so massive and impressive that it could not help but impact the debates among social thinkers, economists, and historians of the new and brilliantly active German universities. This was also a world where the prestige of the classical world was still at its summit and where the members of the elite were commonly steeped in Latin and Greek. Thus it is no surprise that the question was raised of whether those prestigious civilizations of the past, Greece and Rome, with their prodigious achievements in art, literature, and philosophy, might have experienced a similar transformation. This was the starting point for a debate on the nature of the ancient economy that has continued ever since.
In fact from the start the controversy about the nature of the ancient economy developed in the framework of the debate on the policy that the German Reich was to adopt. Free trade was soon
repudiated as a British trick to conquer foreign markets. The German state supported a policy of state intervention and closed economic development, with heavy customs duties on imported goods and low prices at export to conquer foreign markets. This policy of “national economy” was accepted and theorized by the various components of the German academic milieu. The German historical school of economics posited a holistic approach and vigorously opposed the British advocates of economic liberalism and their concepts based on the preferences of individuals on an open market.
This was the historical background to the debate that developed on the nature of the ancient economy. The basic question asked was whether the ancient economy shared features of the new “capitalist society.” The answers were fiercely contradictory. But most of the protagonists shared the evolutionist perspective that impregnated European thought of the time, with the idea that each “stage” of human history was characterized by a specific form of economic and social organization. Among the leading figures of the historical school Karl Bücher was the one who took the strongest interest in the ancient economy. For him not only had the ancient world ignored capitalism, it was the anti-model of a capitalist society, as he advocated in his book on “the rise of the national economy,” Die Entstehung der Volkswirtschaft (Bücher 1968 [1893]). For him, a capitalist economy was to be defined by the existence on the one hand of fixed capital in the form of machines, raw material, and appropriate buildings, and by the existence on the other hand of abstract capital in the form of loans, bonds, stock shares, and other financial tools. Finance provided the link between the several parts of the economy. For Bücher, far from having any “capitalist feature,” the ancient world was at a stage of home production and consumption. Each household aimed to satisfy its own needs. Self-sufficiency was also the motto for the state. Trade and money played only a marginal role. It was only much later, after the stage of “city economy” (the middle ages), that a national economy corresponding to the era of capitalism could develop. We can easily understand why Bücher appeared to be the leader of what was soon to be styled as the “primitivist” school of ancient economics.
The most famous opponents of this theory were the historians Eduard Meyer and Karl Julius Beloch, who, on the contrary, saw a fabulously “modern” economic development in the ancient world (Finley 1979 and Schneider 1990). They insisted on the huge and unprecedented development of towns and of urban population, the introduction of coinage and general usage of money in transactions, the large development of trade. According to Meyer, one could also observe the existence of fabrics and of a competition between cities to make sure that their products would compare favorably on foreign markets. Besides, Meyer considered that “big money” (das Großkapital) was responsible for the disappearance of small farms. This would have made of the ancient Greek world an economy for a large part similar to that of our own times. This is the reason why, in contrast to Bücher, Meyer and Beloch can be defined as “modernists.” The evolutionist imprint was present in the description of the various phases of development of the ancient Greek economy, which would have been similar to the phases of development of the middle ages, the early modern, and modern periods for western Europe.
In fact, it should have been clear from the start that large-scale factories and competition between cities to impose the products of their home industries on foreign markets did not characterize the ancient economy. This does not mean that there could not exist some large handicraft workshops. Such large workshops, with possibly a few dozen workers (sometimes up to 120 as in the case of the metic Kephalos in Athens in the fourth century, as mentioned by Lysias 12.19 [Todd 2000]) could indeed exist, but they were rare. Even if they could be organized on the basis of a technical division of labor (with specializations of tasks in the workshop), they did not require a considerable amount of
capital, as the technology justifying considerable investment in machinery (as was the case at the time of the industrial revolution) was simply absent. Also, rivalries between ancient merchant cities were the norm. But these cities aimed normally to obtain trade privileges from other states rather than to compete in selling their industrial products at lower prices on an open market.
Thus if the question of the existence of capitalism is set in terms of the existence or not of big industry in the ancient world (whether Greece or Rome), the answer is without any doubt in the negative. But already at the time of the origins of the debate between “primitivists” and “modernists,” one can observe an interesting shift in the debate on the “capitalist” nature of the ancient economy. The interrogation went beyond the existence or not of factories. For if Meyer was radically wrong in believing in the existence in the ancient world of factories comparable to those of his time, so was Bücher in defining the ancient world as an economic system based on self-consumption, ignoring market and finance. Thus Robert Pöhlmann already conceived the ancient economy as dominated by capital through the large development of trade, interest loans, rents, and slavery (Pöhlmann 1925). Its “capitalist spirit” was revealed by the existence of characters uniquely devoted to the research of profit. These were the men practicing chrematistics, the commerce of money, condemned by Aristotle. The famous salve lucrum (“Hail Profit”) inscribed at the entrance to a Pompeii house might have been their motto.
Pöhlmann’s themes were in tune with Werner Sombart’s Der moderne Kapitalismus (1902). Indeed, strongly influenced as he was at that stage of his career by the Marxist perspective, Sombart insisted on the existence of two classes of population, the capital holders and the workers, who were deprived of any right of ownership of the means of production. He also stressed that capitalism needed a certain disposition of mind, which was characterized by an absence of a link with any specific national interest and by a uniquely rational approach to social or economic phenomena. In accordance with the prejudices of his time, Sombart linked capitalism with Judaism (Sombart 1913). For him, one of the key characteristics of the new capitalist firm was the double-entry bookkeeping system. It was invented in the world of the Italian merchant cities of the middle ages, but found its full accomplishment only with the full development of capitalism. Sombart considered that rational management of a capitalist firm was not possible without this system.
In many ways, Max Weber, who justifiably remains the giant of the theorists of the period, introduced themes that were similar to Sombart’s. For Weber, it was the Protestant faith that was at the origin of capitalism (Weber 1930 [1904–1905]). Besides, he insisted on the role in the development of capitalism of a general rational attitude towards life and labor. In this a crucial factor (more than the double-entry bookkeeping system advocated by Sombart) was the separation of the capital of the capitalist firm from individual property (Swedberg 1998: 7–21; Weber 1968 [1921– 1922]). Of course these elements were totally lacking in antiquity, to which interestingly Weber devoted a special attention (Weber 1976 [1909]). Weber himself did not refrain from using the word “capitalism” for the ancient economy, provided it was limited to denoting the existence of a developed maritime trade, banking activity, a plantation economy, and of course of slavery (Love
1991: 9–55). But for him the absence of the specific features of capitalist development had also a negative side. The systematic neglect of agricultural improvements and the lack of technical progress in manufacture condemned that world to economic stagnation. Limited growth could take place as long as independent cities or states were able to exploit the possibilities offered by a fragmented Mediterranean. Stagnation was from the beginning to the end the defining characteristic of the ancient economy. In Weberian definition, this was the “ideal-type” of the ancient economy (Swedberg 1998:
193–196). The unification of the Mediterranean and the establishment of Roman rule, with its huge increase in the weight of the state, initiated a process of decline that could not be stopped and was fatal for the economy of the ancient world.
This was the state of the scholarly debate in the 1920s. Ever since and until the late 1980s, curiously, the debate has remained fossilized. It focussed even only on the most primitivist side of Weber, as was the case with the famous Ancient Economy of Moses I. Finley (Finley 1999 [1973]). Until one generation ago, ancient Greece was still assumed to have been a society dominated by an elite of wealthy landowners, living in towns and exploiting a poor rural countryside where people lived in crass poverty. The prevailing orthodoxy admitted the existence of trade, but considered that it was limited in extent, as it was supposed to supply almost exclusively luxury goods for the elites. Financial operations would have remained primitive and have consisted mainly of the usurious practices of private lenders. There might have been an expansion of population, or even of the quantities produced. But that (limited) expansion would have been purely extensive, i.e. it would have been the mechanical result of population growth. But no intensive growth, corresponding to a growth in per capita income, would have taken place. The lack of productivity growth 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.
The conclusion was clear: a stagnating economy and society based on the collection of land rents from poor and exploited peasants can hardly be described as capitalist. And this is why also the possible “capitalist” aspect of the ancient classical economy was now totally out of the picture. If this analysis was correct, ancient Greece should not have a place in a world history of capitalism.
This seemingly so well-established orthodoxy is now totally exploded. A new and much more dynamic picture of the ancient economy as a whole has emerged from recent research (Bowman and Wilson 2009; Scheidel 2012; Scheidel, Morris, and Saller 2007). This does not make the ancient Greek economy a “modern capitalist economy.” But among the leading societies of the period corresponding to the period of c. 1000 BCE to 1700 CE, where the bulk of the aggregate product was
also agricultural production, ancient Greece (and after it the early Roman empire) presents the characteristics of an exceptionally dynamic society and economy. A remarkable intensive growth took place, based on a highly favorable global institutional framework, division of labor, extensive trade, radical improvements in financial and contracting practices, and also technical innovation.
This does not make ancient Greece an authentic capitalist society, if we limit the definition to societies where human-produced capital (instead of land) is the major factor of production and where accumulation of capital in the framework of competitive markets is crucial to determine economic institutions. But it is quite sufficient to justify the place of ancient Greece in a world history of capitalism, both for the comparative evidence it provides for later and more elaborate economic developments, and simply also because in the longue durée it brought about a fundamental and lasting contribution in terms of technology, science, and economic institutions.