07-20-2006, 06:18 PM
I think that essentially, we can not convert ancient prices and wages into modern currency. The reason is that the subsystems of the modern economy are better integrated. Two examples.
(1)
The Talmud contains several stories, and the New Testament one, about the payment of a wage worker who did not work the full day. The general rule was that even if he was hired at the eleventh hour, he was to receive full payment, because the boss did not pay him a wage for his work, but to upkeep his family. This payment was one drachm (= one denarius) per day. The implication is that the labor market was not free (it was embedded in social care) and did not connected demand and supply.
(2)
The younger Pliny describes that at some stage during his term as interim manager in Bithynia, he had some money that was waiting to be invested. He did not find an object. So he consulted the emperor. One of the options was that rich people would be forced to borrow this money and pay interest; to sweeten the pill, it was agreed that the interest was to be lower than the traditional 12%. The fact that this needed to be discussed, proves that interest was only partly regulated by supply and demand.
To put it bluntly, the laws of supply and demand were largerly absent. People who used a situation of scarcity to raise the prices, were not certain to survive, as can be seen in the regular food crises (once every four years; a repeated bad harvest once in seven years).
Another important aspect is that calculating prices was different from the way we are used to do. The cost of labor can be specified, because we have clocks to express it as so and so many dollars per hour. This was impossible back then, and besides: useless, because all production was agricultural production by peasants, who were for 85% outside the market system (the other 15% was sold to obtain the money to pay taxes). From a modern point of view, 85% of the ancient economy was a "black economy", not controled by the taxman or the government.
So, I think that we must refrain from converting ancient into modern money. Still, some conclusions are more or less right:
(a)
In the Hellenistic age, the purchasing power of silver is highest where agricultural resources are best. As a rule of the thumb, Seleucid Babylonia, Egypt, Sicily, and Italy are 15 : 14-10 : 8 : 6.
(b)
In the first and second century, prices were slowly rising, due to an increasing population, which occupied marginal soils.
©
Debasements in the third century resulted in inflation.
I have lost interest in the ancient economy, but the book to read used to be Finley's Ancient Economy, which I felt contained a lot of "it either A or B"-statements, where a C and D seemed possible; I had the impression that the debate between primitivists and modernists was of a poor quality. The so-called "primitivists" were especially good in putting up and shooting strawmen. As I said, I lost interest.
Now, I am reading Makis Aperghis, The Seleukid Royal Economy. The Finances and Financial Administration of the Seleukid economy (2004 Cambridge), which is a bold and well-written book that I can recommend. There's a review here.
I end this long posting with a little poem by an American author named D.H. Rumsfeld:
As we know,
There are known knowns.
There are things we know we know.
We also know
There are known unknowns.
That is to say
We know there are some things
We do not know.
But there are also unknown unknowns,
The ones we don't know
We don't know. :wink:
(1)
The Talmud contains several stories, and the New Testament one, about the payment of a wage worker who did not work the full day. The general rule was that even if he was hired at the eleventh hour, he was to receive full payment, because the boss did not pay him a wage for his work, but to upkeep his family. This payment was one drachm (= one denarius) per day. The implication is that the labor market was not free (it was embedded in social care) and did not connected demand and supply.
(2)
The younger Pliny describes that at some stage during his term as interim manager in Bithynia, he had some money that was waiting to be invested. He did not find an object. So he consulted the emperor. One of the options was that rich people would be forced to borrow this money and pay interest; to sweeten the pill, it was agreed that the interest was to be lower than the traditional 12%. The fact that this needed to be discussed, proves that interest was only partly regulated by supply and demand.
To put it bluntly, the laws of supply and demand were largerly absent. People who used a situation of scarcity to raise the prices, were not certain to survive, as can be seen in the regular food crises (once every four years; a repeated bad harvest once in seven years).
Another important aspect is that calculating prices was different from the way we are used to do. The cost of labor can be specified, because we have clocks to express it as so and so many dollars per hour. This was impossible back then, and besides: useless, because all production was agricultural production by peasants, who were for 85% outside the market system (the other 15% was sold to obtain the money to pay taxes). From a modern point of view, 85% of the ancient economy was a "black economy", not controled by the taxman or the government.
So, I think that we must refrain from converting ancient into modern money. Still, some conclusions are more or less right:
(a)
In the Hellenistic age, the purchasing power of silver is highest where agricultural resources are best. As a rule of the thumb, Seleucid Babylonia, Egypt, Sicily, and Italy are 15 : 14-10 : 8 : 6.
(b)
In the first and second century, prices were slowly rising, due to an increasing population, which occupied marginal soils.
©
Debasements in the third century resulted in inflation.
I have lost interest in the ancient economy, but the book to read used to be Finley's Ancient Economy, which I felt contained a lot of "it either A or B"-statements, where a C and D seemed possible; I had the impression that the debate between primitivists and modernists was of a poor quality. The so-called "primitivists" were especially good in putting up and shooting strawmen. As I said, I lost interest.
Now, I am reading Makis Aperghis, The Seleukid Royal Economy. The Finances and Financial Administration of the Seleukid economy (2004 Cambridge), which is a bold and well-written book that I can recommend. There's a review here.
Quote:An eight year old in Stroud, UKPerhaps the answer is: "we can not know". After that, tell the kid about the clocks. I think the beginning of wisdom, and something you can explain to children, is that those things we know, is a small island in an ocean of subjects about which we do not know, and can not know.
I end this long posting with a little poem by an American author named D.H. Rumsfeld:
As we know,
There are known knowns.
There are things we know we know.
We also know
There are known unknowns.
That is to say
We know there are some things
We do not know.
But there are also unknown unknowns,
The ones we don't know
We don't know. :wink:
