A critical element of economic performance from antiquity to the present

This volume studies information as an economic resource in the Roman World. Information asymmetry is a distinguishing phenomenon of any human relationship. From an economic perspective, private or hidden information, opposed to publicly observable information, generates advantages and inequalities; at the same time, it is a source of profit, legal and illegal, and of transaction costs. The contributions that make up the present book aim to deepen our understanding of the economy of Ancient Rome by identifying and analysing formal and informal systems of knowledge and institutions that contributed to control, manage, restrict and enhance information. The chapters scrutinize the impact of information asymmetries on specific economic sectors, such as the labour market and the market of real estate, as well as the world of professional associations and trading networks. It further discusses structures and institutions that facilitated and regulated economic information in the public and the private spheres, such as market places, auctions, financial mechanisms and instruments, state treasures and archives. Managing Asymmetric Information in the Roman Economy invites the reader to evaluate economic activities within a larger collective mental, social, and political framework, and aims ultimately to test the applicability of tools and ideas from theoretical frameworks such as the Economics of Information to ancient and comparative historical research.

In this chapter, I distill some elements of the demand and supply of institutions designed to reduce transaction costs in the ancient world. I some cases, contractual parties could reduce transaction cost by accurately designing contracts. In other cases, the failure of private coordination placed the state in a better position than private parties in reducing transaction costs. I emphasize two such (by no means exclusive) contexts: cases in which the gains from reducing transaction costs were spread among large numbers of transactions and cases in which contracts have effects for third parties. Identifying a demand for state intervention raises the question whether the state supplied the appropriate institutions. The state supply of institutions to reduce transaction costs in the ancient world varied. A political-economy perspective suggests that differences depend on the extent to which the state internalizes the gains generated from such institutions.

The economic analysis of Roman law has enormous potential to illuminate the origins of Roman legal institutions in response to changes in the economic activities that they regulated. These two volumes combine approaches from legal history and economic history with methods borrowed from economics to offer a new interdisciplinary approach.

The economy of the ancient Middle East and Greece is reinterpreted by Morris Silver in this provocative new synthesis. Silver finds that the ancient economy emerges as a class of economies with its own laws of motion shaped by transaction costs (the resources used up in exchanging ownership rights). The analysis of transaction costs provides insights into many characteristics of the ancient economy, such as the important role of the sacred and symbolic gestures in making contracts, magical technology, the entrepreneurial role of high-born women, the elevation of familial ties and other departures from impersonal economics, reliance on slavery and adoption, and the insatiable drive to accumulate trust-capital. The peculiar behavior patterns and mindsets of ancient economic man are shown to be facilitators of economic growth. In recent years, our view of the economy of the ancient world has been shaped by the theories of Karl Polanyi. Silver confronts Polanyi's empirical propositions with the available evidence and demonstrates that antiquity knew active and sophisticated markets. In the course of providing an alternative analytical framework for studying the ancient economy, Silver gives critical attention to the economic views of the Assyriologists I.M. Diakonoff, W.F. Leemans, Mario Liverani, and J.N. Postgate; of the Egyptologists Jacob J. Janssen and Wolfgang Helck; and of the numerous followers of Moses Finley. Silver convincingly demonstrates that the ancient world was not static: periods of pervasive economic regulation by the state are interspersed with lengthy periods of relatively unfettered market activity, and the economies of Sumer, Babylonia, and archaic Greece were capable of transforming themselves in order to take advantage of new opportunities. This new synthesis is essential reading for economic historians and researchers of the ancient Near East and Greece.

The importance of the institutional framework for economic development is widely accepted today and it is duly stressed in the economic literature. The protection of property rights, the enforcement of contracts and an efficient legal system are the pillars of the contemporary rule of law. However, formal institutions cannot function without being internalized by the citizens and without the strong backing of social norms. Morality and social norms are the major elements of the informal institutional structure, the social capital, which is also critical for social welfare and economic development. In this paper we will discuss both the formal and the informal institutional framework of Ancient Athens, which was a free market society with economic problems similar to contemporary market societies. Athenians developed a highly sophisticated legal framework for the protection of private property, the enforcement of contracts and the efficient resolution of disputes. Such an institutional framework functioned effectively, cultivating trust and protecting the security of transactions. This entire system however was based on social norms such as reciprocity, the value of reputation and widely accepted business ethics. Conformity to social norms as well as moral behavior was fostered by social sanction mechanisms (such as stigma) and moral education. The Athenian example is a further proof of the importance of morality and social norms as transaction cost-saving devices even in quite sophisticated legal systems. Their absence or decline leads inevitably to the need for more regulation and litigation and to a growing preference for clear-cut rules instead of discretionary standards. Athenian law was pioneering in the development of rules and institutional mechanisms suitable for the reduction of transaction costs, many of them surviving in the most complex contemporary legal systems.

The second volume of the Handbook describes different extractive economies in the world regions that have been outlined in the first volume. A wide range of economic actors – from kings and armies to cities and producers – are discussed within different imperial settings as well as the tools, which enabled and constrained economic outcomes. A central focus are nodes of consumption that are visible in the archaeological and textual records of royal capitals, cities, religious centers, and armies that were stationed, in some cases permanently, in imperial frontier zones. Complementary to the multipolar concentrations of consumption are the fiscal-tributary structures of the empires vis-à-vis other institutions that had the capacity to extract, mobilize, and concentrate resources and wealth. Larger volumes of state-issued coinage in various metals show the new role of coinage in taxation, local economic activities, and social practices, even where textual evidence is absent. Given the overwhelming importance of agriculture, the volume also analyses forms of agrarian development, especially around cities and in imperial frontier zones. Special consideration is given to road- and water-management systems for which there is now sufficient archaeological and documentary evidence to enable cross-disciplinary comparative research.

Reconceptualizes economic theory as a tool for understanding the Roman monetary system and its social and cultural contexts.

This book investigates the economic organization of ancient societies from a comparative perspective. By pursuing an interdisciplinary approach, including contributions by archaeologists, historians of antiquity, economic historians as well as historians of economic thought, it studies various aspects of ancient economies, such as the material living conditions including production technologies, etc.; economic institutions such as markets and coinage; as well as the economic thinking of the time. In the process, it also explores the comparability of economic thought, economic institutions and economic systems in ancient history. Focusing on the Ancient Near East as well as the Mediterranean, including Greece and Rome, this comparative perspective makes it possible to identify historical permanencies, but also diverse forms of social and political organization and cultural systems. These institutions are then evaluated in terms of their capacity to solve economic problems, such as the efficient use of resources or political stability. The first part of the book introduces readers to the methodological context of the comparative approach, including an evaluation of the related historiographical tradition. Subsequent parts discuss a range of development models, elements of economic thinking in ancient societies, the role of trade and globalization, and the use of monetary and financial instruments, as well as political aspects.