Elio Lo Cascio, Setting the Rules of the Game
[Part 2 of 2] The Market and Its Working in the Roman Empire, a fascinating close look at the evidence..
Continuing from Part 1 of his chapter titled ‘Setting the Rules of the Game: The Market and Its Working in the Roman Empire’, published in 2020,
Elio Lo Cascio wrote:
Section 5
A DIFFERENT SCENARIO IN LATE ANTIQUITY?
In recent decades, the traditional view of a strong opposition between an economy based on free markets of the high Empire and the economy of late antiquity, which Rostovtzeff once defined as “a blend of oriental étatisme and city-state socialism” (in the essay on “The Decay of the Ancient World and Its Economic Explanations”, published in The Economic History Review of 1930), has proven to be untenable on several grounds as a result of a thorough analysis of all the evidence, especially the juridical sources.
The free market scenario still seems to be prevailing or to be even more pervasive than before. Thus it is debatable whether it is legitimate to speak of an increasing importance of redistributive mechanisms different from the market, that is, of “administered trade” put into effect by a “dirigiste” policy of the “state”, or, according to another view, influential in the past, of an opposition between the natural economy of the “state” and the monetary economy of the private sector.
The complex rules regulating the annona civica and militaris (the collection of goods to be distributed to the populace at Rome and to the soldiers), with the procedures of adaeratio (the commutation of the levy in kind from the tax-payers into a monetary contribution) and coemptio (the compulsory purchase of the goods), presuppose … the working of the market and price formation in it.
What changed was perhaps the degree of market integration across the Mediterranean area, with a decrease in long-distance seaborne commerce, apparently attested by the decreasing number of shipwrecks from the second half of the second century CE onwards.
But even this conclusion has to be nuanced. On the one hand, the markets of the first two centuries are thought to have been certainly less “integrated” or less “interdependent” than Peter Temin would suggest, as is shown, if anywhere, by certain very clear passages in the Elder Pliny … and in Gaius …, both stressing the variety of prices of different things in different places. [See Peter Temin’s bookThe Roman Market Economy published in 2013]
On the other hand, the economic fragmentation of the Mediterranean empire from the third century CE onwards was certainly less pronounced than commonly believed, as is shown inter alia by the evidence of the maritime routes for which the maximum freights were established by Diocletian’s price edict.
It goes without saying that to recognize the continuing working and even the vitality of free market mechanisms does not necessarily amount to giving a positive evaluation of the performance of the economy in the fourth century, let alone in the fifth, especially in the western half of the Empire. It is the contention of this chapter that the preservation of a free market scenario was the result of a recognizable and to some extent conscious choice of the “state”. As we have seen, the role that the imperial administration already undertook purposefully during the Principate was in fact to regulate market transactions, by guaranteeing the rights of all involved parties—producers, merchants, and consumers—and by preventing opportunistic or speculative behavior, which could alter the working of the market and the formation of prices in it.
And one can conclude that, by regulating the market in this way, the authorities (at the local, provincial, and central level) contributed to the drastic reduction of transaction costs brought about by the unification of the Mediterranean under Roman rule.
Several passages in the Digest, as we have seen, show this concern. But this role of the imperial administration is still or even more visible in the evidence offered, on the one hand, by some laws of the Codes of Theodosius and of Justinian and, on the other hand, for Ostrogothic Italy, by some of Cassiodorus’ Variae (which, given the substantial continuity of the economic, social, and administrative structures between the late Western Empire and the kingdom of Theoderic and his successors, can be taken to reflect to a large extent late Roman conditions). I will analyze in detail this evidence in what follows.
Some of these texts show, first of all, that public authority sought to ensure the working of a competitive market by preventing a too dominant position of any of the actors involved. Thus a specific concern on the part of the imperial authorities to defend the interests of merchants (and also of consumers) against the power of the big landowners is revealed by a law of Honorius and Theodosius II of 408 or 409: the emperors forbid the noblest and richest from exercising trade which can be harmful to towns, and they do so with a clear intention [quote] “so that between the commoner and the merchant the exchange could be easier” [end quote]. The aim is to curb speculation, which prevents the formation of a market price.
Section 6
PRETIA IUSTA, AEQUA ET LEGITIMA IN LATE ANTIQUITY
Other texts show that the prices which were formed by the meeting of demand and supply were thought to be aequa or iusta, and legitima [i.e. just and legitimate].
They seem to give, therefore, a positive evaluation, in moral terms, of the working of the market as a market and even a justification of the volatility of prices, if that was not the result of speculative practices.
The expression of aequum pretium was already present in the famous passage of Ulpian we analyzed [in Part 1] on the so-called dardanarii, with reference to the richest landowners, who did not sell their fructus “aequis pretiis” and instead hoarded them because they expected the next harvest to be less abundant and therefore prices to rise.
The expression iustum pretium, on the other hand, is used by the same Ulpian in a fragment taken from his De officio praefecti urbi referring to the sale of caro porcina (pork) in the forum suarium [pig market]: the praefectus urbi has to see to it that the meat is sold iusto pretio, that is without speculation. Now one of the dispositions about the supply of pigs for Roman consumption that we read in the title … of the Theodosian Code says explicitly that the pretium on which the complex procedure of adaeratio ought to be based must be the legitimum one, that is, the pretium of the Romanum forum [the Roman market]. The law seems to convey not only the idea that the price to be considered, in order to calculate the rate of adaeratio, must be the prescribed price, legitimum [legitimate] in this sense, but also that this is the prescribed price in so far as it is the market price current in the place where the contribution has to be delivered.
The expression pretia iusta [just price] appears in a letter written by Cassiodorus as the praetorian prefect of King Witiges in 536–7: because of a crop failure, the requisitioning of wine, grain, and millet “for the supply of the army” had to be condoned in some districts of northeastern Italy. However, since there was an abundant production of wine in Istria, wine could be collected there: but pretia iusta must be paid for it, so that the people of this region would not suffer harm. The pretia iusta are clearly the pretia of the forum rerum venalium, that is, the free-market prices:
“… and since I have learnt that much wine has been produced in Istria, you are to demand from there an amount equal to what had been requested from the above mentioned cities—at market rates, so that the Istrians themselves may suffer no injury, when just prices are preserved for their benefit.”
… Some other texts show that price fluctuations as a consequence of the changing relationship between demand and supply were justified to a certain extent, when they were not the result of speculation.
This is shown by another of the Variae of Cassiodorus, written for Theoderic in 508/511. There was a dearth of foodstuffs in the Gallic provinces of the kingdom. Theoderic writes to the [count] Amabilis in order to solve this situation: the shipowners of Campania, Lucania, and Tuscia have to employ their ships to convoy the food supplies only as far as the Gallic provinces and not elsewhere. It is interesting that the king’s intervention does not affect the prices at which they have to sell these victuales species: it is even conceded that the negotiatores have the liberty to sell them at market prices: [quote] “with licence to dispose of them [the food-stuffs] as may be agreed between buyer and seller” [end quote], namely at market prices which were higher than before because of the shortage, and this behavior is accepted and, one may say, even justified, because that will be an incentive for the negotiatores to carry and market the victualia:
“It is a great convenience to deal with the needy, since famine gives no heed to anything, in order to make good its wants. For he who sells when solicited seems almost to make a gift, even when he serves his own profit. To go with merchandise to the well supplied means a struggle; but he who can bring food-stuffs to the hungry, prices them at his own judgement.”
Even more interesting is the way in which Cassiodorus, writing on behalf of Theoderic, describes in general terms the function of negotiatio where and when there is a scarcity:
“Now, in the region of Gaul, I am aware that there is a dearth of food-stuffs, something to which commerce makes haste in its constant alertness, so that it may sell for a higher price what was bought for a lower.”
… It seems to me that what Cassiodorus means is that negotiatio [negotiation] can better deal with caritas [shortage] since what has been bought in greater quantity is inevitably sold at a lower price. I would translate: [quote] “the commerce makes haste in its constant alertness to a dearth, so that what has been bought in a greater quantity is sold at a lower price” [end quote]
One can better understand, then, what follows: [quote] “It so happens that my forethought will both satisfy the sellers and rescue those in need” [end quote]; the “forethought” being to reserve all the foodstuffs that the navicularii [shipowners] can take from the Tyrrhenian regions exclusively to the Gallic provinces. In the general observation according to which, thanks to negotiatio, [quote] “what has been bought in a greater quantity can be sold at a lower price” [end quote], one can recognize the awareness of the economic, and social, function of negotiatio.
In another of the Variae … it is clearly stated that … one cannot look for caritas (that is, high prices) when there is vilitas, or for vilitas (low prices) when there is caritas (dearth), and Cassiodorus goes on to say that … it is possible to take away from the consumers their “grumbling” and from the traders, who always complain, a “burden”. Again, there is an obvious justification of the variability of prices and the awareness of the role that market regulation can have in balancing the needs of consumers and traders.
Section 7
THE FORUM RERUM VENALIUM
Several other texts seem to suggest that the abstract conception of the market, as opposed to physical markets, was beginning to be present and that the expression forum rerum venalium [which Social Science Files translates via Google as the market of things for sale] could designate not only the specific market of the individual town, but also the abstract market.
Most of these texts relate to the procedures for commutating taxes in kind and for making payments in kind to officers and soldiers. In certain of these texts the forum rerum venalium [i.e. a free market] is a specific market—of Rome or of Campania. Thus, a constitution of Valentinian and Valens of 364 … states that the protectores [who, Social Science Files presumes, are the town officials] must obtain, “for the benefit of their food supply”, according to the “ancient custom”, the prices of the forum rerum venalium, and in this case the reference seems to be to the prices current in Rome.
Likewise, the same emperors state, in a law addressed to the same Symmachus as City Prefect (365 CE), that the different qualities of wine must be sold, as a particular provision in favor of the population of Rome, with an abatement of a quarter compared to the prices current in the forum rerum venalium [i.e. the free market] of Rome. Again, in a Constantinian law on the supply of pigs for consumption at Rome effected through the corporation of the pork suppliers (326 CE), which gives to the taxpayers the possibility of choosing whether to give pigs or money, it is stated that the commutation price, the price of adaeratio, must be the price of the publica conversatio, that is, the market price, but that it must be different according to the various places and times. A law of Julian (363 CE) establishes that the suarii [pigs] of Rome must be paid at the prices which are found … year by year in Campania and not at the prices prevailing in Rome, which were evidently higher.
In other texts, however, it seems incontrovertible that the expression forum rerum venalium [i.e. free market] does not apply to a specific and localized market, but to the market. Thus a law of Gratian, Valentinian, and Theodosius (384 CE) is a piece of legislation of general validity addressed to all taxpayers. It states that the procedure of public purchase must be effected without any kind of compulsion, except in the case of the “more capable”, and at market prices: [quote] “each of Our provincials, at his own discretion and with loyal spirit, shall gladly furnish and sell the requested supplies at the same prices as those current in the public market” [end quote]. In this case the expression forum rerum venalium [i.e. free market] can only refer to the market and not to any particular market. And the same is true of other constitutions [in other regions] …
As we have seen, one of the Variae of Cassiodorus, which contains the “Edict of prices for Flaminia”, speaks of the “justness of the prices” an expression that apparently refers to an effective price regulation in favor of consumers. And the same can be said of the “Edict on maintaining prices at Ravenna”. This poses a more general question. If the prices formed in a competitive market were considered aequa or iusta or legitima [i.e. just and legitimate], how can we explain the attempts to fix prices, instead of simply regulating the market, starting with the most ambitious of these attempts by the Tetrarchic government in the early fourth century?
These were conceived as attempts to curb speculative behavior, as is explained in the preamble of Diocletian’s edict on prices itself. In this sense they do not contradict the notion of a positive evaluation of the working of a competitive market and of the activity of traders in it. That the traders get profits (lucra) is perfectly acceptable, but the lucra must be honesta.
Moreover, the attempts to control prices in any case presuppose the working of a forum rerum venalium [i.e. a market] and the registration of the prices prevailing in it: otherwise the fixing of prices would be wholly unrealistic and unreasonable.
We must assume that even Diocletian’s edictum must have been based on a general investigation or survey of what the market prices were.
But there were certainly other possible reasons for surveying and registering prices, even without fixing them. As I have pointed out elsewhere, the laws of the Theodosian Code referring to the supply of pork (caro porcina) to Rome can be explained only if the complex mechanisms of adaeratio and coemptio (that is, the purchasing of the pigs to be brought to Rome) were based on the continuous gathering of the data on the prices prevailing in the regions of Italy where the canon suarius, the contribution in pigs, was exacted. And an explicit reference to this activity of periodical registration of prices is in the Constantinian law referred to above.
The same story is told, for the fourth century, by the declarations delivered every month by the heads of the koina, the professional associations of craftsmen and merchants, which were active in the Egyptian poleis. These declarations concern the current price of the goods, handled by them, and were made at the office of the logistes (the curator civitatis), the highest officer of the city. They have a standard format and it is demonstrable that some indications were added at a later time, along with the signature of the subscriber: that means that they were produced using a form already written in the office of the logistes and then filled in by the subscriber or the subscribers, the meniarches or the meniarchai of the koinon (the head of the association for the specific month). The standard formula, for the earliest declarations, says [quote] “I declare the price below for the goods which I handle, and I swear the divine oath that I have not been deceitful.” [end quote] Next there is the mention of the commodity or the commodities, then the price or the prices, and finally the date, which is always the last day of the month. The format changes a bit starting from the declarations of the late twenties of the fourth century. From that time on it is made clearer that the declared price is the price of the month just elapsed.
The aim of these declarations is debated: some scholars have thought that, following Diocletian’s edict, and in the face of the monetary difficulties of the period, the imperial authority would have given the guilds the duty of fixing the prices. But it seems clear that the price, at least in the documents of the second period, is not the price which will be in force in the following month, but the price which has been in force in the month just elapsed. One has to conclude that this declared price, at least in the documents of the second phase, is not an imposed price, but is the market price, and that it was thought to be useful to collect and register these data. What for? Because, as with the price of caro porcina [i.e. the pig price] in the regions of southern Italy which paid the contribution, it was necessary to collect this information to guarantee the working of the system of adaeratio and coemptio.
[As stated in Part 1 of this chapter: the procedures of adaeratio involve the commutation of the levy in kind from the tax-payers into a monetary contribution, and the coemptio is the compulsory purchase of the goods.]
The declarations of the first period could be connected with an attempt to fix the prices, but certainly the fact that the practice of collecting and registering prices was not discontinued shows that it was thought to be useful for the fiscal administration. An analogous practice of registering prices is, on the other hand, attested in Ostrogothic Italy, where tax adjusters (peraequatores) subordinate to the Master of Offices (magister officiorum) were in charge of establishing in Ravenna the prices of victualia.
No wonder, then, that the large majority of texts from which one can deduce the continuing importance of the free market were inserted in dispositions referring to the complex financial mechanisms of the imperial “state” and afterwards of some of the barbarian kingdoms.
One can confidently conclude that the notion of a dirigiste state or of a command economy or of prevailing redistributive mechanisms in late antiquity must be abandoned.
The unimpeded working of the forum rerum venalium [i.e. the market] was of paramount importance for the financial management and therefore for the survival of the political organization.
Other types of sources attest the vitality of the market, in the relations of private actors between themselves. But to analyze them even summarily would require at least another paper.
[You have now reached the end of Part 2 of this Social Science Files exhibit.]
Part 1 can be retrieved at this link
The Source has been:
Elio Lo Cascio, ‘Setting the Rules of the Game: The Market and Its Working in the Roman Empire’, in Roman Law and Economics: Institutions and Organizations, Volume I, edited by Giuseppe Dari-Mattiacci and Dennis P. Kehoe, Oxford University Press 2020
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