Walter Scheidel, Approaching the Roman Economy
Defining the Roman economy; Markets and violence; Understanding the Roman economy..
In his chapter on Approaching the Roman Economy published in 2012,
Walter Scheidel wrote:
Chapter 1
Approaching the Roman Economy
Defining the Roman economy
What was the “Roman economy”? In this volume, we apply this term to economic developments that occurred within the Roman Empire, a polity that evolved from an alliance system in peninsular Italy into a large empire that from the second century BCE onward came to dominate and then rule the most densely populated parts of western Eurasia and North Africa west of Mesopotamia and Iran before it eventually experienced substantial contraction in the fifth and seventh centuries CE. …
Thanks to its exceptional size and duration, the Roman Empire offers one of the best opportunities to study economic development in the context of an agrarian world empire. Moreover, the fact that the Roman period was the only time when the entire Mediterranean basin was contained within a single political domain raises the question of how much the specific characteristics of the Roman economy owed to imperial unification.
The Roman economy was a typical pre-modern economy in the sense that it depended on organic fuels and was dominated by agriculture and production within households. In developmental terms, it can be seen as the continuation and culmination of the expansion of the Hellenistic economies of the Eastern Mediterranean and Near East that in turn represented the mature phase of the political and economic recovery that had commenced in the Early Iron Age. The Roman period witnessed the extension of Near Eastern, Hellenic, and Hellenistic features such as urbanization, monetization, market exchange, taxation, and chattel slavery into the western peripheries of Eurasia. …
Causation
Markets and violence
… Historians of the Roman economy divide on whether they privilege market relations – characterized by trade driven by comparative advantage – or power relations such as tribute and rent-taking and slavery and their economic consequences.
According to market-centered narratives, Roman conquest created favorable preconditions for production and trade. Empire lowered transaction costs by reducing risk, easing the flow of information, and standardizing media of exchange at the same time as it facilitated an expansion of primary production (in farming and mining) that in turn encouraged urbanization, manufacturing, and production for the market. It enabled different regions to capitalize on their comparative advantage in producing goods for exchange. In this scenario, the imperial state plays an important role indirectly, by providing favorable framing conditions, and (in some versions) also directly, by issuing regulations or coinage or by investing in infrastructure that was conducive to trade or, at a later stage, by throttling markets through deleterious intervention. For much of the Roman period, these processes are thought to have created a conglomeration of interdependent markets.
Others question whether market exchange and economic integration would automatically arise in that context.
They assign critical importance to the need of the imperial state to process revenue and to the opportunities this created for political and landowning elites. From this perspective, integration was very much driven by tribute and rent collection and by the modes of exchange that it effectively supported. One of the most notable examples of this perspective is the Keynesian “tax-and-trade” model developed by Keith Hopkins: state demands for tax and elite demand for rent and their conversion and transfer impelled reciprocal flows of taxed and traded resources that encouraged urbanization, monetization, and the formation of exchange networks.
The counterpart to this model is Chris Wickham’s account of the unraveling of the Roman economy, a process he explains with reference to the decline of the fiscal system and the elite network of market-oriented production and long-distance exchange that the state sector had sustained.
The most recent incarnation of this approach is Peter Bang’s model of tributary surplus mobilization and portfolio capitalism (i.e., power elites’ expansion of their economic activities into commercial ventures) that is based on both Roman evidence and explicit analogies to other agrarian empires where similar framing conditions prevailed. In all these models, the Roman economy waxed and waned along with the power of the imperial state.
It would be a mistake to regard these perspectives as mutually exclusive causative interpretations. In the most general terms, it is hard to see how Roman rule could have failed to lower transaction costs in ways that were, at least in principle, conducive to an increase in the volume of exchange. Yet this does not establish that any such development did not critically depend on the redistributive fiscal mechanisms of the state. At the same time, it is important to recognize that these two approaches do not merely represent two complementary sides of the same coin. The question which types of relations were essential or dominant in bringing about observed outcomes is not merely of intellectual interest but of vital importance for understanding the dynamics of Roman economic development and especially its limits and decline.
This debate underlines the pivotal role of comparison, theorizing, and model-building. Divergent modern reconstructions are ultimately shaped by analogies: with post-Roman Europe in the case of market-centered narratives or with other patrimonial empires in the case of coercion-based models. They are also indebted to different theoretical underpinnings and conceptualizations. One way forward that has the potential to bridge the gap between formalist or neo-classical notions of comparative advantage and a benign state and more substantivist or fiscalist models of commercial development is offered by the New Institutional Economics and Economic Sociology. By demonstrating how social and cultural features shape economic activity, they alert us to the overriding significance of historically specific “rules of the game”, the incentives and constraints that were instrumental in determining Roman economic development. Students of the Roman economy have recently begun to pay attention to these fields and one can only hope that this trend will continue. …
Understanding the Roman economy
… [The] Roman economy can readily be said to have expanded for multiple and largely interconnected reasons. In Republican Italy, empire created capital inflows, checks on natural growth that were counterbalanced by slave imports, and novel opportunities for commercial exchange, elite enrichment, and violent redistribution of assets to commoners.
In the long run, empire also yielded benefits for subject populations: peace reduced transaction costs, turned the entire Mediterranean into an ‘inner sea,’ and improved the ratio of natural endowments to labor; tributary integration mobilized resources and enabled portfolio capitalism; knowledge transfers improved productivity; and previously underexploited mines produced bullion that not only supported monetization but also enabled imports from beyond the empire. All these developments coincided with a climate optimum that sustained production and productivity growth and, at least for a while, with an absence of pandemics that might have weakened state power or commercial connectivity. In view of all this, it is hard to see how a substantial economic expansion could possibly have failed to occur.
This outcome was overdetermined in the sense that it was favored by numerous convergent factors. Although it seems plausible that these factors interacted and reinforced one another, we cannot simply assume that each of them was necessary or significant in producing observed outcomes. …
… Roman economic history is rich in apparent contradictions.
Violence, unleashed in campaigns of conquest and civil wars, was undeniably an evil that caused great suffering and dislocation, yet it also mobilized resources and protected real incomes by curtailing demographic growth.
Slavery was another evil that fostered inequality but also spurred rationalization and productivity growth: it could simultaneously increase output and skew consumption, simultaneously benefit and harm society.
The failure of the Roman Republic is usually viewed as a time of crisis: yet it also coincided with unprecedented economic development in the core of the Empire, and while the ruling class may have been the main beneficiaries of this process, the wealthy also contributed to the coercive redistribution to commoners prompted by the exigencies of civil war.
Conversely, the prolonged peace of the first quarter-millennium of the imperial monarchy is usually considered as a period of prosperity: yet stability also facilitated rising inequality by allowing elites safely to accumulate assets and depressed real incomes by encouraging demographic expansion.
Epidemics interfered with economic activities by disrupting trust-based commercial networks but also alleviated population pressure.
Urbanization was beneficial in that it encouraged division of labor and human capital formation but also detrimental by boosting density-dependent diseases, which in turn could be beneficial by curtailing population growth.
These events and trends do not contradict each other: they simply add up to the intricate dynamics that are typical of all historical processes. Awareness of these natural complexities will help us overcome the all too common notion that different elements of human development move in tandem: that the Roman combination of imperial peace and a larger population and greater economic output somehow represented an optimal state of affairs. Comparative evidence is vital in suggesting that this was probably not the case: real incomes of workers could fall as GDP grew; human bodies could shrink as the economy expanded. Tabulating the many ways in which the artifacts of the Roman economy were bigger, better, or more numerous than before or after is simply not sufficient to show that conditions were generally better: intensification should not automatically and exclusively be identified with increasing prosperity and success. Conversely, evidence of abatement is not necessarily a sign of wholesale deterioration: it merely denotes change in the configuration of land and labor, of extraction and consumption, of local autonomy and interregional integration.
The story of the Roman economy is not a simple story of rise and fall: it is a complex interplay of different determinants of human welfare in which economic output and its distribution played an important role. …
[That is the end of this Social Science Files exhibit.]
The Source has been:
Walter Scheidel, ‘Approaching the Roman Economy’, in The Cambridge Companion to the Roman Economy, edited by Walter Scheidel, Cambridge University Press 2012
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