by Ober, Josiah
As we have seen (ch. 2), the Mediterranean world is naturally subdivided into many microregions, each with distinct resources and microclimates. Microclimatic diversity, along with the uneven distribution of important natural resources (e.g., copper, silver, timber) contributed to making the Mediterranean basin especially well suited for the emergence of complex networks of short- and medium-distance trade. Mainland Greece has striking geophysical features: notably, a highly indented coastline with many offshore islands and a topography characterized by small agricultural plains amid rugged but not impassable mountains. The Mediterranean world was relatively easy for maritime traders to move around in. But by the same token it was quite difficult for would-be conquerors to master, especially those who (like the Achaemenid Persians or steppe nomads) relied heavily on cavalry. The mountainous Greek terrain offers certain of the geophysical features that the political anthropologist James C. Scott has documented as contributing to “the art of not being governed” by inhabitants of upland southeast Asia.13
The geography and climate of Greece were certainly potential assets, but focusing on these relatively invariant conditions leaves us with the question, raised in chapter 1, of why Greece experienced a remarkable efflorescence only beginning in the period 800–300 BCE. Why, if climate and geophysical conditions were the drivers of efflorescence, was Greece not similarly prosperous long before or long after that era? As we have seen (fig. 1.1 and ch. 4), although there were earlier (Middle Bronze Age Minoan) and later (fifth–sixth centuries CE) periods of efflorescence, there was nothing in Greek antiquity comparable to the efflorescence of the classical era. Greece did not have a particularly high-performing economy in the medieval or early modern periods; Greece’s modern economic record has been mixed at best. So, if geography and climate are to explain the phenomenon of wealthy Hellas, we need to know why these conditions proved especially valuable in 800–300 BCE and why they did not produce equally remarkable and sustained growth in much earlier and later eras.
The classical Greek world benefited from its location among extensive and well-integrated economic zones managed by great empires (notably Persia and Carthage). Classical Greek authors, for their part, claimed that mainland Greece (and especially Athens) occupied a particularly advantageous location in respect to trade.14 There were profits to be reaped by Greeks who served as Mediterranean middlemen, exploiting a favorable location between the environmentally and economically diverse regions of western Asia (especially after the consolidation of the Persian Empire in the sixth century BCE), northeastern Europe, and northern Africa (with its two great civilizations, Egyptian and Phoenician). A somewhat similar situation pertained in the Roman, Byzantine, and Ottoman periods. Yet in those later periods, Greece was no longer even nominally politically independent—and Greeks were therefore subject to paying rents to an external imperial center.
Political independence may have helped classical Greeks to benefit from their location relative to big imperial economies, which might help to explain the efflorescences of the Minoan and late Roman periods.15 But, pace the standard ancient premise, which linked independence with poverty, sustained classical-era Greek political independence, in the face of Persian imperialism, was at least in part a product of Greek wealth: Large numbers of oared warships and many well-trained infantrymen, all financed by a thriving economy, proved essential to the preservation of Greek independence (ch. 7). So here we confront what social scientists call “the problem of endogeneity.” It is the exceptional wealth of classical Hellas that we are seeking to explain. If wealth is part of the location-based explanation (because wealth helps sustain political independence and independence conspires with location to create exceptional wealth), then location, in and of itself, is no longer an adequate explanatory factor. Location may, of course, be part of a causal explanation, but even in conjunction with geophysical conditions and climate, location cannot be the cause, pure and simple.16
Exploitation (in the strong sense of rent-seeking, rather than the weak sense of benefiting from favorable market conditions, on which see ch. 9) provides another possible explanation: The wealth of classical Hellas was certainly based in part on rents. The economic performance advantage of classical Greece, relative to other premodern societies, might be explained if we could show that the Greeks extracted more rents at a lower cost than did other premodern societies. There is no doubt that Greeks extracted substantial rents. In the period of classical efflorescence (as before and for a long time thereafter), Greeks employed various forms of nonfree labor, including historically innovative forms of chattel slavery.17 Athens gained very substantial revenues from subject states in the fifth century BCE, during the acme of the Athenian Empire.18 Moreover, the classical Greek world gained indirectly from forms of political domination and economic exploitation in regions at its periphery. In at least some cases, domination and exploitation in these peripheral regions arguably emerged because of, and were sustained by, Greek consumption. Grain exported to Athens at below-market prices by friendly Thracian dynasts may be construed as Athenian rents.19
Yet if we are to explain Greek economic performance by reference to rent extraction via exploitation and domination, we need to answer a prior question: Why were the Greeks (or the Athenians in the imperial period) able to extract more rents than other premodern societies? It seems implausible to explain this (hypothetical) rent advantage as a matter of will, by claiming that Greeks (or Athenians) had fewer moral qualms about exploiting and dominating in their own interest than did people in other premodern societies. If, on the other hand, something distinctive in Greek institutional development facilitated more effective rent extraction, then we are back to square one: If we posit that exceptional growth was based on exceptionally effective rent extraction, we must explain how the Greeks managed to gain rents that were “left on the table” by other societies, which were no less willing to dominate and exploit.
One explanation of why Greeks were able to exploit others as slaves or serfs is that the relatively large “middling” population of the Greek world rendered exploitation more efficient, because close cooperation among many middling citizens enabled them to dominate outsiders and control slave populations more efficiently. Sparta, with its many helots (ch. 6), and democratic Athens, with its many chattel slaves and (for a time) imperial subjects (ch. 8), might be cited as two, somewhat different, cases in point. Similarly, we might suppose that high real wages and a large “middling class” of consumers made widespread slave-owning more economically feasible.20 Yet we are, once again, confronted with an endogeneity problem: The large middling (suprasubsistence) population of the Greek world is an aspect of the general wealthy-Hellas phenomenon we are seeking to explain. So to the extent that coordination among middling citizens and high real wages are parts of the exploitation-based explanation, exploitation becomes inadequate as a standalone causal factor.
Due attention to geography, climate, geophysical conditions, location relative to other societies, and exploitation must be part of any serious attempt to explain the performance of the Greek economy. Yet even in the aggregate, these factors are inadequate to explain the phenomenon of wealthy Hellas. In the rest of this chapter, I develop the two explanatory hypotheses introduced above. Here the hypotheses are laid out in general terms, at the level of social theory. If it is to be believable as an explanatory account of the real world, a social theory must be empirically testable—in this case, by reference to the evidence of history. In subsequent chapters, we will test the two hypotheses by reference to the narrative of Greek history, from the Early Iron Age to the Hellenistic era. This method allows us to ask whether or not actual changes, over time and in different parts of the Greek world, are parsimoniously explained by the theoretical framework. The test of the theory is how well its predictions are confirmed by the actual historical record.
I do not claim that the hypotheses sketched above and developed below are fully adequate, in and of themselves, to explain the clas
sical efflorescence. I am aware that each of my hypotheses suffers from the same problem of endogeneity that I raised above, in reference to other explanations. That is to say, the phenomenon I am seeking to explain, Greek wealth and cultural achievement, eventually became a driver, as well as a product, of fair rules and of competitive innovation. Institutions and civic culture productive of specialization, continuous innovation, and learning cannot be the whole story behind the classical efflorescence. But without understanding how distinctive Greek institutions promoted increases in productivity and in the value of exchanges, we cannot explain why and how classical Hellas became exceptionally wealthy.
In the following two sections, I illustrate the hypotheses with a few examples of Greek, mostly Athenian, institutional history. As we see in subsequent chapters, Athenian institutional development was exceptional in many particulars, and we need to juxtapose development in Athens with other paths to (and away from) development in other Greek poleis. Yet the institutional features highlighted here were not unique to Athens, or to other superpoleis; they are what made the classical Greek efflorescence such a distinctive chapter in world history.
FAIR RULES, CAPITAL INVESTMENTS, AND TRANSACTION COSTS
The first hypothesis for explaining the phenomenon of Hellas’ wealth during the era of classical efflorescence centers on the general Greek (and especially democratic Athenian) commitment to what I will call “rule egalitarianism.” Rule egalitarianism means in practice that many people within a society, rather than just a few elite people, have equal high standing in respect to major institutions: e.g., to property, law, and personal security. They have equal access to information relevant to the effective use of those institutions and to the information produced by institutions (e.g., laws, public policy). They are treated as equals by the public officials responsible for enforcing institutional rules. In sum, they can expect to be treated fairly. In an ideal rule-egalitarian society, all people subject to the rules would be treated as equals. In the Greek world, those enjoying equal high standing were, in the first instance, the adult male citizens—although, in some poleis, equal standing in respect to certain institutions was eventually extended beyond the citizen body.
Rule egalitarianism drove economic growth, first by creating incentives for investment in the development of social and human capital, and next by lowering transaction costs. A rule-egalitarian regime produces rules that respect individual equality of standing, as opposed to establishing a strictly equal distribution of goods. Yet rule egalitarianism has substantial distributive effects: Equality in terms of rules pushes back against extremes of inequality in the distribution of wealth and income. Rule egalitarianism may best be thought of as a limited form of opportunity egalitarianism. It is limited because equality of access and treatment is in respect to institutions and public information, not to all valuable goods. Of course someone committed to rule egalitarianism might also be an outcome egalitarian and/or a full-featured opportunity egalitarian—but the classical Greeks were neither. The key points are, first, that it is possible for a society to be committed, as the most developed states of classical Greece were, to equality for citizens in respect to rules governing standing without being committed to complete equality of outcomes or all social opportunities, and, next, that more equal rules tend to moderate extremes of wealth and income inequality through progressive taxation and limiting opportunities for rent-seeking by the powerful.21
It is uncontroversial to say that classical Greek society was characterized by historically exceptional levels of equality in terms of access of native males to key public institutions. The norms and rules of Greek communities tended to treat native males as deserving of some level of standing before the law, association in decision-making, and dignity in social interactions. No Greek community was ever rule-egalitarian “all the way down”—women, foreigners, and slaves were never treated as true equals. But among native males, the level of equality was remarkable when compared to other premodern (indeed pre-twentieth century CE) societies. A turn to relatively stronger forms of egalitarianism in Greece began in the eighth century, and the general trend continued (although not without interruption) through the classical era.22
In many classical Greek poleis, rule egalitarianism among native men was codified as citizen-centered government. In focusing on the citizen, Spartan-style citizen aristocracy and Athenian-style participatory democracy may be regarded as strikingly different versions of the same general regime type (chs. 6 and 7). Some Greek communities were, in George Orwell’s memorable phrase, more equal than others. But even Greek oligarchies were strikingly egalitarian by the standards of most other premodern societies. The constitutional development of individual polis communities was certainly not uniformly in the direction of greater equality of access and treatment for natives. Yet, with the increasing prevalence of democracy (chs. 9–11), the median Greek polis was more rule-egalitarian in the later fourth century BCE, at the height of the classical efflorescence, than it had been 500, 300, or even 100 years previously.23
Social norms and rules that treat individuals as equals can have substantial effects on economic growth by building human capital—that is, by increasing median individual skill levels and by increasing the aggregate societal stock of knowledge. Relative equality in respect to access to institutions (e.g., law and property rights) and to the expectation of fair treatment by officials within institutions encourages investments by individuals in learning new skills and increases net social returns to employment of diverse skills. It does so because norms and rules that protect personal security, property, and dignity lessen fear of the powerful.
When I believe that my person, property, and standing are secure (in that I have ready institutional recourse if I am assaulted, robbed, or affronted), I am less afraid that the fruits of my efforts will be expropriated arbitrarily by those more powerful than I. In this case, I have better reasons to seek my fortune and to plan ahead. It is rational for me to invest in my own future by seeking out domains of endeavor in which I can do relatively better—that is, to seek a relative economic advantage through specialization. I also have a higher incentive to invest effort in becoming more expert within that specialized domain, insofar as I believe that there is a market for that sort of expertise—so that the return on my self-investment will have a good chance of being positive. Under these conditions, I will rationally choose to defer some short-term returns by spending time and energy gaining information and developing skills that I believe will enable me to do better in the long run.24
The Greeks were not strangers to the idea of incentives and pursuit of rational self-interest, and they certainly understood the correlation between ambition, achievement, and equality of standing. When Herodotus sought to explain the break-out of Athenian military capacity after the democratic revolution of 508 BCE, he argued that “while [the Athenians] were oppressed, they were, as men working for a master, cowardly, but when they were freed, each one was eager to achieve for himself.”25 If we are to judge by their literature, ancient Greeks had a solid “folk” understanding of how individuals make choices in light of strategic calculations of interests centered on expected utility and anticipation of others’ behavior. Although the Greeks lacked a general theory of prices and markets, rules protecting individuals from exploitation, and subsequent individual choices to invest in human and social capital, led to the emergence of a vibrant market-based economy.26
Rationally chosen individual investment in human capital development can, in the aggregate, have powerfully positive economic effects through increasing societal levels of specialization and productivity. By investing in learning, each individual becomes correspondingly better at whatever endeavor in which he or she is engaged. Individuals who choose to invest in themselves, who have freedom to seek out different domains, and who have specific natural capacities (e.g., high intelligence) have reason to seek out those domains in which their capacities can be more effectively exercised. So, for ex
ample, an intelligent individual may pursue some sort of knowledge-intensive work rather than manual labor-intensive subsistence farming. Societal productivity increases because greater specialization of economic function produces more diverse goods more efficiently and because workers in each specialized domain, having invested in gaining expertise, are individually more productive. If information about the quality and availability of goods is widely shared, then better goods are produced at a lower cost, enabling more people to consume a diverse range of goods at a higher level.
Even in the absence of a general economic theory, little of this notion was lost on the classical Greeks. In the introductory section of Plato’s dialogue, Protagoras, for example, a young Athenian citizen named Hippocrates (not the famous medical writer) expresses his hope of receiving specialized training from the sophist Protagoras. Hippocrates’ boundless eagerness to learn something of value, and his willingness to pay for it, points to a culture of self-conscious investment in one’s own education. In Xenophon’s Memorabilia, Socrates urges a friend to recognize the human capital represented by the skills possessed by his female dependents and their motivation to employ those skills: “everyone works most easily, speedily, best, and most pleasantly when they are knowledgeable in respect to the work.”27 In the fifth and fourth centuries BCE and continuing into the Hellenistic era, the Greek world saw a spate of technical writing in a variety of fields: basic introductions to areas of expertise (for example, medicine, warfare, and public speaking) aimed at an audience eager to learn—and especially at potential students, like young Hippocrates, who might be willing to pay expert teachers in their drive to improve their own special skills.
Meanwhile, per the discussion of exploitation, above, specialization was also a way for the Greeks to increase gains from the forced labor of slaves. Greek states (see ch. 9) and individual slave owners alike invested in human capital by buying skilled slaves and training slaves in specialized skills.28 But slaves were not mindless machines. As the Greeks realized, slaves made behavioral choices that affected productivity. Writing in the later fifth century, the anonymous author known to classical scholars as Pseudo-Xenophon (also known as the Old Oligarch) notes that slaves in Athens would not be economically productive if they feared arbitrary expropriation. Moreover, he claims that the Athenian citizens who owned slaves recognized this behavioral fact and passed laws protecting slaves from arbitrary mistreatment accordingly (Ath. Pol. 1.11–12). We do not know how much practical protection this legislation actually afforded Athenian slaves, but the general point is that the economic value of increasing human capital, by establishing appropriate rules governing conduct, was manifestly appreciated by the classical Greeks.