by Glenn Rogers
What is the point? The point is that the people of ancient Rome were free to engage in business enterprise as they were able. If you, citizen of Rome or not, had a product to sell or a service to provide, you were free to do so. If people were willing to pay what you were asking, you could sell your product or service at a profit. No one controlled the process. No one told you what to do or how to do it. According to the definitions of capitalism and free enterprise you can find anywhere, the Roman economy was one of capitalistic free enterprise.
But the system was not one of only small local merchant enterprise. Mary Beard notes that,
In 62 BCE Cicero had to hand over 3.5 million sesterces for his new house on the Palatine, and there is almost no information about how this kind of a payment was organised in practice. It is unlikely that Cicero’s slaves simply wheeled truckloads of cash through the streets under armed guard. The whole transaction points instead either to the use of gold bullion, which would at least have required fewer trucks, or more likely to some system of paper finance or bonds, and so to a relatively sophisticated banking and credit system underpinning the Roman economy,” (SPQR A History of Ancient Rome, 325).
Here we see what many economists usually associate with a modern, more fully developed form of capitalism, which also suggests that the Roman economy was in fact one of capitalistic free enterprise. In The Cambridge Companion to the Roman Economy, economist Peter Temin said, “… but I argue that the economy of the early Roman Empire was a market economy because of the importance and prevalence of market activity,” (48). And of course as everyone knows, that would amount to capitalistic free enterprise.
Slavery in the Ancient World
Slavery was pervasive in the ancient world. It was simply part of their reality. The people of stronger societies oppressed and enslaved the people of weaker societies. This is not to say that such oppression and slavery was right or appropriate; it certainly is not. In my view, all people are created in the image of God and have the same intrinsic worth and value. The concept of one person owning another one is silly. However, ancient people had not yet figured that out, and the stronger oppressed and enslaved the weaker.
In Book 1 of Politics, the Greek philosopher Aristotle actually set forth a theory of what he called natural slavery, an argument designed to support the practice of slavery. His argument was basically that people who possess no ability for reasoning ought to be slaves. The ability to reason he had in mind was the kind of reasoning he and others trained in analytical thinking engaged in—the kind of reasoning philosophers do. He argued that it was in the best interest of the people bereft of advanced reasoning skills to be the slaves of those who could reason more effectively.
Since slavery was abolished in the West, most people have come to reject such reasoning. We understand that slavery is abhorrent. However, in the ancient world, in the Middle East, in Asia, in Africa, in South America, Central America, and North America—in every region of the world—slavery and oppression were, at one timem, the norm. It wasn’t right, but it was the reality of that time.
Okay, so there was slavery in the ancient world and it was wrong. Beyond acknowledging that, what’s the point? Quite often you will encounter Marxist economists and sociologists argue that capitalism is bad because it exploited the free labor of slavery in order to boost the profit margin. If the labor is free, the profit margin is greater. No argument there. Lower expenses generate higher profits. But there are, I think, a couple of things wrong with associating capitalism with slavery.
First, did owning slaves equal free labor? It did not. There was considerable cost associated with owning slaves—the purchase price of the slave, food, shelter, and clothing. And if a slave ran away, it could be expensive to get him or her back. How did these costs associated with owning slaves compare with wages one would pay to hired workers? While it is impossible to do an actual cost comparison analysis, some historians have suggested that the idea of owning slaves amounting to “free labor” is simply mistaken. There were costs associated with keeping slaves. Owning slaves did not equal free labor.
But more than that, it must be acknowledged that there is no specific connection between any economic system that a society might choose and whether or not that society also happened to embrace the practice of slavery. To argue that there is a link between slavery and capitalism is like arguing that there is a link between having a glass of wine and being an alcoholic—since wine has alcohol in it, if you have a glass of wine you must be an alcoholic. That sort of an argument obviously involves a logical fallacy. Because in times past capitalistic free enterprise has been the economic choice of a society that has also chosen to practice slavery does not mean that there is a connection between the social choice of slavery and the economic choice of capitalistic free enterprise.
It is appropriate to note that ancient peoples did not refer to their economic system as capitalistic free enterprise. Those terms were not part of their vocabulary. Neither was the term economics or economic system. Those modern terms came centuries later. But what they did on a day-to-day basis as they conducted business necessary to their existence and wellbeing was in fact what we now call capitalistic free enterprise.
Summary
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 beginning, people produced goods and sold them for a profit to buy the things they needed. Their culture was one of capitalistic free enterprise in that they owned the means of production and were free to buy and sell without government regulation.
The Greek economy was also one of capitalistic free enterprise, for they too owned the means of production (the land, the sheep, the goats, the equipment for making wine and olive oil, the tools for making leather goods, etc.) and were free to market their goods without government regulation.
So too, the Roman economy was one of capitalistic free enterprise. The people owned the means of production and were free to produce, market, and distribute their goods or services with the goal of making a profit.
Chapter 4
The Middle Ages
The Rise and Fall of Feudalism
Generally speaking, the Middle Ages covers the 1000 years between the fall of Rome in the 5th century CE to the beginning of the modern era in the 15th century, from roughly 400 to 1500. Scholars debate when the fall of Rome actually occurred, but when the Visigoths, under the leadership of Alaric, entered and sacked the city of Rome on August 24th in 410, most will agree that that was the beginning of the end for the mighty empire.
The Fall of Rome
What did this crushing blow for the empire mean for the average person on a day-to-day basis? John Davenport has pointed out that, “Millions of people from the lowest reaches of the Danube River to the windswept hills of northern Britain built their lives around Roman power and authority. Suddenly, in 410, that power and authority could no longer be depended upon,” (The Age of Feudalism, 11).
The sacking of Rome in 410 was just the beginning. Waves of invaders continued their brutal attacks on city after city. “The final blow to the Roman world came in 476. That year, the last Roman emperor stepped down and was replaced by a barbarian tribal chieftain who made himself king of Italy. The Western Roman Empire soon crumbled into a dizzying and ever-shifting patchwork of barbarian kingdoms,” (Davenport, 14).
If you lived in one of the cities that got sacked, your economic reality would have changed immediately. If you lived in an outlying area, things might have continued much as they had for a while. But in time, the old social structure, including the economy, collapsed completely.
A New Social Structure, A New Economic Structure
As the government of Rome crumbled, the social fabric of the empire unraveled. Under the Romans, large cities had been hu
bs of power, wealth, and therefore, security. But as city after city fell to the invaders, people began to retreat to the countryside. But even there, things were changing.
The Roman Empire had been ethnically and culturally diverse, but barbarian Europe was much more so. Each of the tribal groups that replaced the Romans in various places throughout the empire was vastly different from its neighbors. Germans were not Goths, Lombards had nothing in common with Franks. Anglo-Saxons were completely different from Vandals. The barbarian label, in fact, masked a wide range of political and social differences and many ways of life, (Davenport, 16).
Local kings not only fought one another for power; they often engaged in struggles for power with the warriors who fought for them. “Barbarian leaders … never exercised total or uncontested control over their people,” (Davenport, 16). Post-Roman society was an unsettled, uncertain mishmash of European cultures struggling not only for power and control, but also struggling to give birth to a new kind of society.
Not surprisingly, the villas and estates, along with the villages and farming communities that surrounded them, became the focus of daily life. The owners of the estates and villas quickly realized that their security depended on a good relationship with the new king. In The Middle Ages: An Illustrated History, Barbara Hanawalt provides a brief overview of how a new way of existing began to emerge. It should be noted, however, that what is being described here in brief took several hundred years to become fully realized.
In theory the king held all the land, and the counts and dukes simply used it at his pleasure. They, in turn, granted it to the barons and knights, because the kings were weak, however, the counts and dukes had considerable control over the land granted them … A warrior who received a fief from an overlord swore that he would be his homme (“man” in French) and would serve him in times of need. This oath was called a homage … Giving over land as a fife was risky. A lord needed to ensure that the vassal would meet the obligations that the gift implied. By the 13th century the arrangements had become more formal. Written charters spelled out the services the lord and his vassal owed each other. Because the institution began as a military one, fighting, not surprisingly, was the vassal’s first obligation. To avoid abuse, specific terms were set. The vassal was to serve his lord in war at his own expense. He was required to provide the armor, horses, and men needed to support the war effort. If the period of service was more than 40 days, however, the lord had to help pay the costs. The vassal also had to accompany his lord in times of peace and be present at his castle for two or three months each year. The lord also had certain rights that he could exercise to protect his land. He always reserved the right to take the land back from an insubordinate vassal … The lord could take the proceeds of the estate during this period. He also reserved the right to marry the widow and daughters to anyone of his choice, (60-61).
Obviously if you were not one of the counts, dukes, barons, or knights (let’s call them the upper or ruling class—later called the aristocracy) you were one of the lower or working class people—peasants or serfs. So how did the working class live?
Only 5 to 10% of the population made up the ruling class. The other 90 to 95% were either peasants who were free or serfs who were not. Generally speaking, the peasants received management and protection from the lord they served. The people had small houses in the village and enough land to have a small garden and perhaps some fruit trees. There may have been an outbuilding (a place for a few animals) and an area for a strawstack. The peasants held title to their land and home, the serfs did not. But basically their work was the same. In exchange for the lord’s management and protection, they had to “plow the lord’s land, plant it, reap and harvest it, carry the crops to market, and mend his fences, roads, and home,” (Hanawalt 63-64).
During most of this feudal period there wasn’t much in the way of free enterprise. People were busy surviving. The crops they grew for their lord paid for their rent and protection.
Challenges and Changes
While there were many challenges to be overcome during the Middle Ages, two appear to have altered the status quo most dramatically: the challenge of Islam, and the Black Death—the plague.
Concerning Islam, Davenport explains that, “After Muhammad’s death in 632 the geographic expansion of Islam was relentless. By the early eighth century Muslim armies had conquered all of the Middle East, taken North Africa, and pushed into Europe. Only military defeats in France (732) and at the gates of Constantinople (718) kept Islam from ending Europe’s feudal experiment,” (26).
But that was only the beginning of the conflict between Europe and Islam. Christians had been making pilgrimages from Europe to the Holy Land for a long time. Initially, after the Muslims took over Jerusalem, the pilgrimages continued with little difficulty. But when a more radical group of Muslim Turks came to power, the Christian pilgrims began to be abused. Pope Urban the II called for the church to retake the Holy Land. His enthusiastic rhetoric worked. The first of the Crusades were under way, and Jerusalem was retaken—temporarily. Unfortunately after a series of confrontations, with the Holy Land as both pawn and prize, the crusades ended in a stalemate. Ultimately the church was not able to retake the Holy Land, a reality that seemed entirely incredible to the people of Europe. Many began to doubt whether the church was, in fact, the representative of God on earth as it had always claimed. The church obviously wasn’t as powerful as it claimed it was, and neither were the lords who took their armies to fight the Muslims. The people began to wonder—if the feudal lords were not strong enough to defeat the Muslims, were they strong enough to protect the people of Europe? The seeds of doubt regarding the feudal social structure had been planted.
The second challenge to European feudalism was the Black Death, the plague. Though the crusades had shaken the confidence of the people in the nobility and in the church, society had regrouped, and by the 14th century things were going well.
Towns and cities were thriving as they had not done since the days of the empire. London exploded to 30,000 inhabitants. Paris counted over 100,000 residents. In 1300 the Italian city of Milan had a population of 150,000. And these cities buzzed with economic activity. Large-and small-scale manufacturing expanded at a dizzying pace. Weaving, glassmaking, leatherwork, and paint production were but a few of the hundreds of industries that sprang up in the cities across Europe. Along with factories, foundries, and mills, came skilled workers who organized themselves through craft guilds, (Davenport, 56).
What impact did all this development have on feudalism? It began to displace it. Although the manors were productive as well, the urban growth was outpacing the rural growth. And even though Europe was still officially feudal, capitalistic free enterprise was being reborn in the major population centers. And then it happened. In 1347 a ship arrived in Sicily. Nearly everyone on board was dead. When the officials realized there was sickness on the ship, they had it towed back out to sea. But it was too late. Rats had gotten off the ship while it was in port and were making their way through the city.
In addition to the disappointment and confusion associated with the crusades, Europe had suffered a famine between 1315 and 1317, and what is now referred to as the Little Ice Age had brought significantly lower temperatures to the continent. Though in some respects things were looking up, many of the people of Europe were cold, hungry, and depressed, not strong enough to fight off the deadly disease.
By 1348, only one year after its arrival, the plague had spread throughout Italy, leaving perhaps 50 to 60 percent of the people dead. From there the Black Death crossed the Alps and dispersed in every direction. Austria, Hungary, and Germany were next. These places lost 30 to 40 percent of their populations. Soon France was suffering. Half of its population died from the disease. In England the death toll climbed to 30 percent only months after the bacterium appeared there. Indeed, within a mere two years an estimated 25 millions Europeans had perished. By 1351 no part of Europe remained untouched by
the epidemic, (Davenport 60-61).
Reeling from the devastation, some people blamed the Jews. Others blamed the nobility and God. Regardless of who they blamed, society was once again, as it had been 900 years earlier after the fall of Rome, ripe for change.
The Decline of Feudalism
The number of deaths from the plague had decimated the workforce. There weren’t enough people to work in the fields. How could a noble entice what laborers there were to work on his estate rather than someone else’s? One of them came up with the novel idea of paying his workers a wage. When other nobles heard what he was doing, they decided to offer wages as well. It was the first time the peasant’s labor had been valued in terms of money. Many of them, after working and saving, were able to purchase land of their own, and eventually own and operate their own independent farm.
Paying wages to the farm workers had been a good idea, but in the end it was not enough. The nobles were not able to recover, not able to rebuild their feudal system to a fully functioning level. Feudalism was dying.
People found the idea of wages appealing and so did business owners who needed workers. People who had always been tied to the land decided to move to the cities and look for work. Many of Europe’s larger cities began to grow again, some of them growing larger than they had been before the plague epidemic. And of course, when people moved into the cities looking for work, they were not only employees; they were also consumers. The stage was being set for a boom in capitalistic free enterprise.
