A Brief History of Capitalistic Free Enterprise

by Glenn Rogers

  What is Ms. Leick describing? Ancient capitalism.

  Where the temple or palace did engage in economic activity, Leick explains:

  Businessmen also took on the supervision of agricultural services, collected their produce, and marketed them. Then they paid the agreed amount to the institution and kept the rest as profit. Since the maximization of returns was their main means of achieving profit they would squeeze from the primary producers as much return as possible. The archives show that they also tried to slow down the payments to the institutions which had given them vast amounts of silver, (88).

  And this capitalistic free enterprise environment was not only the playground of the men of that time. Leick refers to archeological evidence of successful businesswomen as well.

  The archives also demonstrate that anyone with a good sense for business and good communication skills, who could make and maintain contacts with a great variety of peoples and was willing to put much effort into the business, could prosper … Women were often involved in business partnerships although the absence of gender designations in some documents makes this less obvious. They could help their husbands or carry on the business after his demise, but they could also act independently and finance their own enterprise. One type of business activity in which women seem to have been especially well represented was the keeping of taverns and the brewing of beer. Such places could be made even more profitable by offering female companionship, (90-91).

  Even though women in the ancient world didn’t enjoy the equality that Western women enjoy today, the women of those ancient societies, like the men, had economic opportunities—if they had the means and drive to take advantage of them.

  Summary

  So what does all of this mean? Since capitalism is an economic system where the means of production are owned by private individuals who sell their goods with the intention of making a profit, it means that the economic structure of the ancient world was capitalistic. Ancient peoples engaged in capitalistic free enterprise. Socialists don’t like to admit this, but the archeological record is clear. Capitalism was alive and well in the ancient world.

  Chapter 3

  The Economies of Ancient Israel, Greece, and Rome

  If this were a normal history of Israel, Greece, and Rome we would spend a great deal of time on the culture and philosophy of those amazing ancient societies, societies that gave us not only Judeo-Christian theology, classical philosophy, and democracy, but much of our governmental structure and legal code as well. However, our goal in this chapter is not a traditional presentation of the history of Israel, Greece, and Rome, but is an inquiry into the economic structures of each of those cultures. We begin with Israel.

  Israel

  According to the biblical story, God called Abram when he lived in Ur in Mesopotamia. No one knows for sure, but this may have been as early as 2,000 BCE. God explained to him that he wanted him to relocate to a place that he (God) would reveal to him. Being a reverent man, Abram obeyed, and after a great deal of traveling, settled in the land of Canaan (on the coast of the Mediterranean between Syria and Egypt). God told Abram that he wanted to create a new nation of people, and that he (Abram) would be the father of that nation. Abram’s name was changed to Abraham, and he and his wife Sarah had a son named Isaac, who had a son named Jacob, and the rest, as they say, is history.

  Jacob’s family encountered some challenges and ended up living in Egypt where they eventually became slaves. After living four hundred years as slaves in Egypt, and growing into a nation of perhaps a few million people, the descendants of Abraham were eventually freed by another man God called and chose for that specific job—Moses. Moses led the people of Israel out of Egypt, and after receiving God’s law on Mt. Sinai (perhaps around 1,400 BCE) they wandered around the desert for a long time, eventually finding their way back to the land of Canaan where their forefather, Abraham, had settled. Following God’s instructions, the Israelites routed the indigenous people of Canaan and divided up the land among the different tribes, each tribe being the descendants of one of Jacob’s sons or grandsons. Having a land they could now call their own, and having a specific ethnic identity, they officially became the nation of Israel. The region then became known as Israel. The Old Testament book of Joshua (chapters 13-21) discusses the division of the land to each of the twelve tribes with each family within that tribe being allotted a plot of land so they could grow crops and keep their flocks and herds.

  God had given Moses a law (usually referred to as The Law of Moses) that served as the constitution of the new nation. It was not only a religious law, but a civil law as well. Israel was a theocratic society where God was the supreme ruler. After the allotment of the land, what kind of an economy existed in this ancient theocratic society?

  In 2 Samuel 24:24, the story is told of King David buying a threshing-floor and some oxen from a man named Araunah. The story involves the buying and selling of personal property. In 1 Kings 16:24, King Omri buys the hill of Samaria for 6,000 shekels. More buying and selling of property. And in the book of Jeremiah, the prophet Jeremiah buys a field for 17 shekels. What do these examples of buying and selling mean? They mean that after the basic allotment of land to each family unit, land could be bought and sold.

  Discussing ancient Israel, Phillip King and Lawrence Stager observe that:

  Agropastoralist villages, in which the inhabitants had a mixed economy of farming and herding with rather small landholdings in the highlands, were dominant throughout the Iron Age, before and during the monarchy. The basic residential unit, the pillared house, whether in rural or urban setting, persisted. The households based on agriculture remained the primary social and economic units. Through barter and marketing, these individual and collective households were the dominant economic reality of ancient Israel, (Life in Biblical Israel, 192-193).

  In other words, they traded and bought and sold without any kind of governmental oversight. That is free enterprise. It may have been on a small scale, but it was still free enterprise. And as the centuries passed and Israel grew into a wealthy, powerful nation, there was a lively import-export feature to their economy. Exports included: cereals, olive oil, wine, dates, honey, salt, textiles, leather, limestone, pine and oak, while imports included: tin, lead, silver, copper, iron, woven garments of purple-dyed wool and cedar, (King and Stager, 194).

  By the first century CE, as Jesus taught large crowds of people, he told parables that involved buying and selling, and occasionally referred to how much an item could be purchased for in the market. Clearly, ancient Israel’s economic structure, like the other societies of that time, was, essentially, capitalistic free enterprise. Strictly speaking, though, ancient Israel was not entirely capitalistic. The nation as a whole was given the land of Canaan by God (or they took the land by force from the indigenous people—depending on your point of view), and each family within each tribe was given an allotment of land. They did not have to buy the land. However, after that charitable beginning, people produced goods and sold them for a profit to buy the things they needed. Their culture, after being established with help from God, was one of capitalistic free enterprise in that they owned the means of production and were free to buy and sell without government regulation.

  Greece

  To understand how the economy of ancient Greece worked, one must understand several things about the physical terrain of Greece and the kind of societies it developed.

  The Greek peninsula has been inhabited by several different people groups for thousands of years. After the collapse of the Mycenaean society, which may have occurred around 1200 BCE, new groups began to migrate to (invade?) Greece: the Dorians, the Ionians, and the Aeolians. These groups were hearty, independent peoples who chose to make the best of it in a challenging and sometimes hostile environment.

  Speaking of the people who considered the “land of Delphi and Olympia their homeland,” Camp and Fisher observe that:

  It is a land composed of low bu
t steep mountains, which separate numerous coastal valleys and upland plains. The geography does not encourage unity, and during the high point of their history the political structure of the Greeks was based on the polis, a small independent city-state which controlled a limited amount of arable land, protected and set off from its neighbors by steep ridges and mountainous terrain, (The World of the Ancient Greeks, 7).

  Not only was the terrain difficult—mountainous, hilly, rocky, with infertile soil—the climate was mostly hot and dry. Summertime temperatures were usually over 100 degrees; winters usually in the 40s. Rainfall was uneven, with more rain in the north and west than in the southern part of the region. The region of Attica, in the southeast of the peninsula where Athens is located, is one of the least fertile areas. Only certain crops would do well in the harsh Greek environment—the main ones being grapes, olives, and figs. Horses and cattle did not do well either. The region was better suited for donkeys, mules, sheep, and goats. Such a hard and unyielding land could only be managed by an equally hard and unyielding people. What did they do to not only cope, but to thrive and prosper?

  Because the harsh terrain made it difficult to develop a socially and politically unified Greece, a number of independent city-states arose: Sparta, Athens, and Corinth, among many others. Each city-state was sovereign with its own specific form of government and social structure. But,

  All Greek cities shared several common traits. In addition to a fortified lower town, there was usually an acropolis at or near the center. This was a free-standing hill, separately fortified and easily defended, to provide a place of refuge in the event of the fall of the lower town. As the high point of the city, it was also often chosen as the site for sanctuary of the principle deity … The town was essentially divided into three types of space: public, private, and religious. Public space would be provided in the form of an agora, a large central square of the city. The square itself could accommodate a wide variety of activities: meetings, elections, markets, festivals, athletic contests, processions, theatrical performances, military drill, and the like, (Camp and Fisher, 78).

  Notice that markets is in the list. Aside from the occasional special events, on a day-to-day basis, the polis agora was a market place, a place where goods were sold and bought.

  Archeological evidence suggests that nearly all Greeks had land to farm. Yet most of them chose to live in the polis (the city) and travel out to their farm to tend their land when there was work to be done. Why own a farm (with a house on it) but live in the city? In the Cambridge Illustrated History of Ancient Greece, Susan Alcock points out that given the challenges and unpredictability of the harsh environment, even though the Greeks valued self-sufficiency, many of them chose to live in the city because doing so provided them with a support network in difficult times (28-29).

  They lived in the city but they owned land. Given the specific focus of this study, that is a crucial point. Greeks owned their own land. They owned the means of production. That meant that they also owned the produce that their land generated: grapes, olives, figs, whatever. And they were free to sell whatever portion of that produce they wished to sell.

  While there were economically challenging times over the centuries, there were also times when the Athenian economy was doing quite well. Nick Fisher (Cambridge Illustrated History of Ancient Greece) observes that:

  Other new sources of wealth, and signs of the successfully expanding economy of fifth century Athens included the renting out of houses, especially to metics [resident aliens or freed slaves]. Also, many traditional land-owners, owners of scattered farms, leased them out for cash crops. Significant too was an increase in the lending out of money at interest, for example to merchant shipping (93).

  While at times there was some limited regulation regarding trade—for instance, during war or other periods of extreme economic challenge (Camp and Fisher, The World of the Ancient Greeks, 82-83), on a day-to-day basis individuals in ancient Greece were free to engage in buying and selling, investing and lending, which means they engaged in capitalistic free enterprise.

  Rome

  According to legend, Rome was founded on April 21, 753 BCE by Romulus, who served as the first king. Adkins and Adkins (Handbook to Life in Ancient Rome, 3) note that from its founding in 753 until 509 BCE, Rome was a monarchy with kings associated with the Sabines, Latins, and Etruscans. Mary Beard, however, doubts that any Etruscans served as kings in ancient Rome (SPQR A History of Ancient Rome). Either way, governmental changes occurred and from 508 to 27, Rome functioned as a Republic, expanding its borders dramatically.

  When Octavian assumed the title of Augustus in 27 BCE, Rome officially became an empire. It was the largest and grandest empire ever known, placing its imprint on the world for over a thousand years. More has been written about the Roman Empire than any other ancient society. But as noted earlier, my purpose here is to consider the kind of economy that existed in the Roman Empire. There can be no doubt that the empire’s economic activity contributed to its success. So what kind of an economy did it have?

  The ancient world was agrarian in nature, rather than industrial in the modern sense. That is not to say there was no industry of any kind. There was. But mostly they grew food and kept flocks and herds. The Roman economy, for the most part, was rooted in agrarian activity. However, there was industry in that grapes were made into wine, olives were pressed to make olive oil, wool was spun into thread which was then woven into cloth, hides were tanned and made into leather-goods, copper and iron were mined and the ore processed and made into useful objects. There was shipbuilding. And there was a vast merchant network that carried on trade throughout the empire on land and sea. Rome’s economy was vibrant. But given the point of this brief study, the question to consider is, in what kind of economic structure did all this economic activity occur?

  Given that we are comparing capitalistic free enterprise with socialism, Mary Beard’s comment regarding any sort of official government oversight of the economy is significant. In a discussion of the minting of coins and monetary activity, she says, “Like most states before the eighteenth century or even later, Rome had no monetary policy as such, nor any financial institutions where that kind of policy could be developed,” (46). What does this mean? It means that Rome was not socialistic. Rome did not own the means of production and did not control production, pricing, distribution and so forth. Like the Greeks before them, the people of Rome were free to engage in profit-oriented economic activity.

  While Rome’s economy was not anywhere near as complex as modern Western economies, it was still a complex market economy with a great deal of specialization. According to Charles Freeman (Egypt, Greece, and Rome: Civilizations of the Ancient Mediterranean, 448-451), an important feature (or segment) of Rome’s economic structure was the Villa, a countryside estate with links to urban centers. Such estates could have been in the countryside just outside of Rome or in the far reaches of the empire. To qualify as a Roman villa, however, especially those in the regions beyond Italy, there had to be some level of Romanization, that is, the owner had to be making an attempt to be Roman. Specifically,

  A Celtic farmhouse might originally consist of a single large room shared by animals and people. The first sign of progress would be the segregation of the owner from his animals. Then rooms for sleeping would be built to separate him from his workers. If prosperity continued luxuries could follow—baths and heating systems, corridors, mosaics, and painted wall-plaster. Finally the façade of a grand villa might be turned away from the farmyard and graced by a portico (Freeman, 449).

  Notice the comment if prosperity continued. Personal prosperity was a goal to be realized. The idea of wealth or financial equity did not exist. Whatever else may have been the case in the ancient Roman world, a person could work hard, create, produce, buy, sell, make a profit, prosper, and enjoy the fruit of his or her labor. Capitalism.

  Freeman goes on to say,

  Villas required craftsmen, builde
rs, plasterers, tilers and mosaic layers. Typically the owners would also buy in all the trappings of civilized Roman living, including glass and silverware, and the fine Samian pottery (terra sigillata) with its red gloss and raised designs … This suggests links with local market centers and provides further evidence for Hopkins’s thesis that there was a surplus of agricultural produce which could be sold to buy these skills and goods. There is no doubt that there was an economic symbiosis between villa and urban center (449-450).

  Another feature of the larger Roman society and economy was the Vici—villages or small towns. “They were often sited at a crossroads or a river site and normally developed organically in line with local demands, perhaps acting as centers for local crafts as well as marketing,” (Freeman, 450). In addition to these Vici, were the specialized forms of urban centers that “grew up alongside the military bases. Soldiers were comparatively well paid and there could be several thousand men in a single garrison, such as Vetera (modern Xanten) on the Rhine. So there were rich pickings to be had, and evidence from sprawling townships which emerged near the camps suggests that traders were attracted from far afield,” (Freeman 450).