Josiah Ober on the Ancient Greek Economy
Aug 6 2012

Josiah Ober of Stanford University talks with EconTalk host Russ Roberts about the economy of ancient Greece, particularly Athens. Ober notes that the standard view of ancient Greece is that it was very poor. Drawing on various kinds of evidence, Ober argues that Greece was actually quite successful, and that the average citizen of ancient Athens lived quite well by ancient standards. He suggests two possible explanations for Greece's economic success--an openness of the political process that reduced transaction costs and encouraged human capital investment or innovation and cross-fertilization across Greek states. The conversation also explores the nature of evidence for understanding antiquity and the prospect for future discoveries pertaining to ancient Greece.

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Explore audio transcript, further reading that will help you delve deeper into this week’s episode, and vigorous conversations in the form of our comments section below.


Aug 6 2012 at 12:00pm

I’m surprised to hear about the “moral horror of slavery.” Slavery was an economic institution, the spoils of war, and leaves both sides better off than killing the enemy.

Slavery ended exactly when it could no longer be justified, meaning economically justified.

Its death throes led to tries at other and weirder racial justifications, which justifications are the ones left to us as the reasons for it. But those are the reasons that lost last, not the ones that led to slavery.

See Stanley Cavell The Claim of Reason

Ole hansen
Aug 6 2012 at 4:16pm

Slavery was definately a part of the spoil of war in the ancient times.
The ancient world had a magnificent trade on the Mediterenaen sea, at a time when shipping was much more efficient than export over land. Also consider that the Mediterenean sea was more protected than the more open big oceans. Therefore the cultures around the Mediterenaen became wealthy from all the trade across the ocean. We got all these great societies where innovation and new thoughts influence us today.

Christianity, juadaism and islam are all a result from the trade in the ancient world. Later on, Christianity and islam would divide the Mediterenaen sea, and it lost its significance as a center of the world outside China.

The prophet Mohammed of islam became wealthy by rading caravans from Mecca that was going to Syria and had go by the city of Medina. He also aquired wealth by in two cases expelling and and in one case killing the three
jewish tribes in Medina.

Lastly, islamic empires had the extra tax jazya on its christian and jewish populations, and thus aquired wealth from the trade made by these groups.

Mohammeds militarism couldnt have been possible without all the wealth made by trade in the ancient world.

I do believe its easy to overlook the fact that the Mediterenaen sea trade created lots of the wealth for the ancient greeks, romans and jews.

We all have this modern mental image of the Mediterenaen as a divided ocean. But in the time of the greeks it was the center of the world and the center of trade.

Aug 6 2012 at 5:59pm

Not sure how relevant Islam is to discussing a time period that predates it by a millenium.

I’ll get the obvious out of the way and say that making empirical arguments about this or that 2-3000 y.o. system of government’s effects on the economy of that time is a tiny bit silly. Doubly so since a lot of the information we have about other parts of the Ancient world comes from, undoubtedly unbiased, greek and roman sources.

Even making the huge leap of faith of believing every claim made in this podcast I’ll offer two alternative hypotheses for the greek’s tolerant, discursive society: 1) mountains 2) big sea access. I’m sure the peoples of the Near and Middle East would have loved to have long conversations about how 10% of the population should democratically govern their democratic society. Sadly they had more important worries, such as dealing with 2+ millennia of being trampled into the ground by crazy horse people coming out of Central Asia and later Mongolia. Trying to emulate “300” out there tended to produce pyramids of tens of thousands of your countrymen’s skulls.

How does causation go here? Were the greeks prosperous because of democracy or were they democratic because of an overarching feeling of safety, in part generated by their prosperity?

Alfonso de Rigales Monsenor Caraca Cao de Limon
Aug 6 2012 at 6:28pm

[Comment removed for supplying false email address and for crude language. Email the to request restoring your comment privileges. A valid email address is required to post comments on EconLog and EconTalk.–Econlib Ed.]

Ole Hansen
Aug 6 2012 at 7:13pm

To Sebastian :

Islam and christianity originated in this ancient world. My point is that islam and christianity divided this world into two civilisations.
Previously, the Roman Empire had the whole Mediterenean as its domestic sea. Now it got cut in half, and the previously prosperous trade on this sea got greatly diminished.

Europe is a modern concept and i believe it is hard for a lot of people to imagine the importance of the Mediterenean sea as a single trade zone. Back then, North Africa was probably part of the same civilisation as Southern Europe, so trade between Egypt and Greece was much easier than today.

Why did Christopher Columbus try to reach India by going westwards? Didnt the spanish want to avoid the trade with India going through the islamic world?

Aug 7 2012 at 11:40am

Ole that makes a lot more sense to me, thank you.

Additional question: how do we know anything about Ancient Persian rule of law issues? Enough to speculate that their system stifled private enterprise or innovation? Is it fair to assume that they’d behave like either the barely literate feudal lords of early medieval europe, or the actively exploitative governors that later empires in the area would install?

Mort Dubois
Aug 7 2012 at 12:44pm

I think we can take it for granted that any civilization that produces art, architecture, and literature was producing wealth beyond subsistence. I’m willing to buy the argument presented here, that the Greeks produced more than their neighbors, on the strength of their cultural production alone. And I’m particularly struck that we know the names and something about the life of not just royalty, but common people and artisans as well. Can the same be said for contemporary civilizations? It’s a simple test of the relative equality of citizens: can you identify anyone who wasn’t royalty, or a military leader? Bonus points if that person is female.

Great podcast. Would also love to hear about how the Roman economy, and contemporary Chinese economies, worked.

Aug 7 2012 at 3:32pm

Interesting podcast, but I’m a little confused over the premise about it being “understood” that the Greeks were “poor.” The suggestion that we shouldn’t compare the ancient Greeks to modern advanced living standards goes without saying. The line about an Athenian John Doe not shopping at Walmart may be cute, but I’m not sure why Russ would “cherish” it. I’m not even sure what it means. After all, plenty of middle and upper-middle class people shop at Walmart, simply because they save money on the same commodities they would get from other stores. As far as I can tell, people with means don’t eschew Walmart. There is no evidence, indeed, there is no reason even to imagine, that average ancient Greeks would avoid buying discounted commodities if given the opportunity. In any case, a philosophy which acknowledges that material wealth and power are not the only requirements for “happiness” is talking about being “poor” in a different context. I’m “poor” relative to Bill Gates, but I’m happy. Of course, with the Greeks having so much debt, it might be true to say that right now they are poor. 🙂

Likewise, what Russ said about people romanticizing the greatness of Greek democracy confused me. Anyone with even a casual interest in history, culture, equality, liberty, rule of law and political philosophy would rightly acknowledge the remarkable contribution of the Greeks. Who imagines that “the Greeks” sat around all day discussing philosophy? And at the risk of romanticizing, I wish that some of our current political leaders had the vision and courage of some of those ancient Greeks!

I’m confused regarding the statement about some historians claiming that all ancient societies were pretty much alike, even if the context is narrowed to a discussion about the living standards and wages of the “average Joe.”

And finally, I wonder what Russ meant about people having a “nostalgic vision of the Greeks” as being noble folks not engaged in “crass and sordid” materialism. I suspect that Russ, being a libertarian, is so steeped in his own bias of people romanticizing “socialistic” government, that he imagines these same people romanticize a pseudo-egalitarian Pollyannaish vision of ancient Greece. But even some libertarians cherish their own Pollyannaish visions. I would prefer that Russ would focus less on those people who have simplistic and unrealistic notions of a “big and involved” government. In other words, if you want to argue against socialism, at least have the gumption to argue with smart socialists. 🙂

Aug 7 2012 at 4:36pm

I didn’t find any references to a comparison of and the differences between the relative climate of the 19th century in Greece relative to that of the classical era and its effect on agricultural productivity. With the little ice age still having an effect in the 19th century, couldn’t it be that the agricultural carrying capacity of Hellas was materially less than in the classical era? After all, it’s well known that Thermopylae was right by the coast in classical times and now in the present day it is thousands of yards from the coast because of changes in ocean levels.

If Mr. Ober sees this (or if you could direct a follow-up question to him, Russ), I’d like to learn more on climatical comparisons and if anyone has tried to control for that in comparative economic research like Mr. Ober’s.

While I do think that Greece did have a highly productive economy and Mr. Ober’s work is a great additional fact proving out the effectiveness of liberalism, we shouldn’t discount other important effects like climate and that perhaps one of the reasons that Greece was able to be so free was that it had a favorable climate that encouraged the good life as one of the ancient authors puts it.

Aug 8 2012 at 3:26pm

These off-beat podcasts are great fun, an enjoyable break from the pressing and depressing economic conundrums of the day. Fascinating, but perhaps not surprising, that democracy and competition were keys to prosperity. Has there ever been a society with widespread prosperity that didn’t have plenty of competition? Likely not.

Aug 9 2012 at 3:13pm

Russ, now that you have these great, improved transcriptions of the podcast, a little bit of formatting for easier reading would go a long way.

Aug 11 2012 at 4:04am

I’m not sure I understand the premise of this podcast. I didn’t know there was a debate over whether the Greeks were rich or poor. These are the people who had time to invent theater, the Olympic games, philosophy, time to listen to Homer’s tales, and the resources time and ability to build a navy that could fight off the Persian Empire.

Within that culture area were nation states as diverse as Athens and Sparta, which preview most of the political debate you can watch on TV these days. There were some that lived like kings and some that kept the pigs, but all could have their day in court and so rhetoric was a primary field of study. How a king lived was really not much different than how a commoner lived.

I think of the ancient Greeks as much like the Scots in the 1700s: some farming, some fishing, some cattle thieving, some fighting; Producing what Ben Franklin called “white savages,” but also producing men like Hume and Adam Smith.

It’s really what we’d think of as a redneck culture – fierce independence that spawns all varieties of human behavior because there are all varieties of men. Diversity fosters innovation, but what allows diversity is independence.
And that is what makes men “rich.”

Aug 13 2012 at 9:00am

First time commenting on this site after downloading the podcasts for over a year.

I too really enjoy these obscure topics and while not necessarily agreeing with the validity of all arguments made it puts a smile on my face that someone is indeed attempting to pursue understanding in this area from which listeners can enjoy in their own convenience. When thought of in this context it may be so that our civilisations were not so dissimilar.

I would also be interested Russ if you were to continue to periodically interview persons with similar focuses on other civilisations. A Mongol podcast would be great!

Aug 13 2012 at 11:57am

Ralph, you make a good point about the prerequisites for cultural vibrancy, but the focus of the podcast was on material conditions. A key point I got out of it is that the two are related. The scope given to cultural and intellectual independence led to commercial freedom, including competition, which led to relative material abundance.

Aug 14 2012 at 12:36pm

Great podcast, and great comments. I just want to mention something that came to me while listening: Is it possible that Tellus was given that name in the story as a play on the Greek “telos?”

Aug 15 2012 at 1:39pm

The people who really get the squeeze are those
making low six figures. Too wealthy to qualify for
the laundry list of middle class tax cuts but not wealthy enough that most income comes from cap gains which is taxed at a lower rate. the very rich and the poor/middle class pay less share than small biz owners and the professional class. the reason for this is i believe people making 100-250+k are made to feel that it is gauche to complain about taxes at that income.

Aug 15 2012 at 9:57pm

This podcast romanticized the Athenians while demonizing the Persians unfairly. The vision of democratic, liberty and property loving Athens vs. a rent seeking Persian empire is grossly unfair. Plato discusses those, such as Theaetetus, who have their property taken away because of a weak property rights system in Athens. I don’t know if Athenian democrats routinely, took property by fiat but they did regularly banish and put to death citizens by a simple vote. They even put Socrates to death for his politics.

Both Plato and Aristotle had a less than favorable opinion of Greek democracy–in part because the majority would be tempted to take from a minority. I don’t know how this podcast could omit this. Plato’s Republic and Aristotle’s Politics are well known works that completely contradict this podcast.

On the other hand, the Persian empire has its positive points. Cyrus is generally regarded as a great historical figure, and Persepolis had a great culture, making many contributions to the arts and philosophy.

You also ignore that Greek democracy was not very stable. Shortly after Plato’s death, Alexander took control of the entire region. Greece actually achieved it’s material height (in wealth and art, producing the Venus de Milo and the Victory of Samothrace) while under an empire.

Russ was eager to project modern views of liberty and democracy onto the ancients. Liberal democracy clearly produces prosperity now, but we shouldn’t have to romanticize history to bolster this view. I think Ober knows better but wanted to please his interviewer. This entire line of thought was outside his actual thesis anyway.

Aug 18 2012 at 1:37pm

Joog, you may be right that liberty in ancient Athens was limited and that Persian culture was impressive. But remember that Ober’s research found that the material well-being of the Greeks was high, and higher than that of the Greeks. There’s no contradiction. My conclusion is that Persian opulence came at the expense of the masses. That Greek material well-being was the consequence of the competition that came with relative freedom is a parsimonious hypothesis.

Aug 30 2012 at 12:19am

As an economist and student of classical history, I found this very engaging. Many of my private thoughts were vindicated. Of course the Greeks were highly urbanised, with high levels of human capital and labour specialisation.

I would have thought that slaves were an economic commodity whose utility were reflected in their price. In times of a labour shortage, and rising wages, arbitreurs would be motivated buy slaves from non-Greek lands, thereby raising slave prices. The abuse of slaves, I would have thought, occurred when there was an ‘excess supply’ such that the opportunity cost of abusing them was low. Otherwise, slaves are valuable and protected.

(Greeks tended not to, on the whole, enslave other Greeks, even in war, and rarely went on military campaigns for the purpose of conquering others. Obvious exceptions included the enslavement of Athenians after the failed Sicillian expedition, and Alexander’s conquests.)

Of course, a decentralised societies are not the only ones that achieved high(er) standards of living. All empires (Roman, Byzantine, Mongol, British, Russian, Napoleonic, and no doubt Persian) reduced piracy, standardised weights and measures, and introduced a set of common laws. The question is whether the infringements of rights by the few were so pervasive that the costs overcame the benefits of empire.

Comments are closed.


About this week's guest:

About ideas and people mentioned in this podcast:Books:

      • Republic, by Plato. Translated and edited by Benjamin Jowett. Online Library of Liberty.


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Podcast Episode Highlights
0:36Intro. [Recording date: July 30, 2012.] Russ: Topic is the economy of ancient Greece, and your recent paper on the topic, titled "Wealthy Hellas." You say in that paper that ancient Greece has always been perceived as very poor. Why was that the standard view? Guest: I think there are really two reasons. The first reason, the one that's most obvious if we think about from the point of view of classical studies is that the Greeks themselves described themselves as poor. So, if we read in a couple of classic passages by Herodotus or various other places in the Greek tradition, the Greeks are constantly describing themselves, when they compare themselves to the great empires of the Middle East, as in a condition of poverty. The problem is of course that they are comparing themselves not against the ordinary people of these great empires but against the kings and the courts of these great empires. So, it's certainly true that compared to, say, Croesus of Lydia or Darius of Persia, any Greek was indeed relatively poor. But compared to an ordinary individual, a subject of Croesus of Lydia, or Darius of Persia, the ordinary Greek was actually quite wealthy. So, I think for us the relevant measure is trying to ask ourselves: What was the ordinary individual, what were the conditions of their lives? The other reason that I think that Greece is considered poor is that the Greeks were poor, when we compare them to the conditions of modernity. There's no ancient, no pre-modern society, no society before the 19th century that looks anything but poor when we compare it to the most advanced states of the 19th and 20th century. But once again, I think that's the wrong level of comparison. We really need to be asking ourselves: How well do the Greeks do compared to other pre-modern societies, not how well do they do compared to the most advanced societies of the last few hundred years. Russ: Why does it matter? It's an interesting historical puzzle, perhaps; and it's important to say that this view of Greece that you've just described, which is this self-described poverty, has been the common view, you suggest, of the historical record. And you are challenging it in this paper. Why is it important? Guest: I think the main reason, for me anyway, why it is important is because we would like to know, at least I'd like to know, as a political theorist, how well highly centralized imperial societies do against decentralized dispersed-authority societies. So, if we look at the really well-known societies of the ancient world, they tend to be very highly centralized. Ancient Egypt, Syria, Persia, Lydia, and so on. So all centered around a king and a court, a palace structure. The Greek world provides the most important single counterexample of a highly dispersed society--that is, with no central palace structure, with literally hundreds of independent states, each with their own independent governments. So, the question we have before us is: Can a dispersed authority system, like the world of the Greek city states, do relatively well economically or was that kind of society doomed to poverty compared to highly centralized societies? Russ: Now of course those highly centralized societies left monuments like the pyramids, the tombs, that clearly tell us a lot about the leader, but not very much about the average person. Guest: That's right. Russ: So, they can be misleading for the other reason. Guest: What you get is--there is a surplus, a small surplus, that can be taken from these agricultural societies, and that's concentrated in a very few hands in these centralized systems. But if overall we were to say that the economy of the most centralized ancient societies was far and away superior to the economies of the most advanced of the ancient dispersed societies, then we'd have something that I think would be worth thinking about in terms of how economics works generally. But if it's not the case, if it turns out that a dispersed society like that of the ancient Greeks actually performs very well, once again, we have something to think about in terms of general economics.
6:12Russ: Let's digress for a minute about the Greek political system and the role of power in that system. I don't know a lot about it. We certainly romanticize Greece as this great democracy; but it wasn't much like the United States. Maybe it wasn't like anything except Greece. So, tell us how authority and power worked there and why it's relevant. Guest: Well, briefly, in the period we are concerned with--that's between about 600 and 300 B.C.--the Greek world is divided up into roughly 1000 individual states: city states, which ranged from the really big ones, like Athens, that had a population of perhaps 200,000-300,000 people; a territory of about 1000 square miles, down to really small ones with territories of just a few dozen square miles and a few thousand people. So, the Greek world in general is extremely dispersed in terms of political authority. These are independent states or quasi-independent states. They are not just counties or sub-states of some superior entity, Greece. They are all completely independent. Greece is a culture zone in antiquity, not a politically centralized state. So, within those roughly 1000 states there is quite a range of forms of political organization, ranging in some cases from tyranny or a hereditary monarchy all the way through really quite robust forms of a democracy that were certainly as democratic in terms of the extent of citizenship, rule of law, as anything we in the Western world up through the latter part of the 19th century. Completely male franchise in Athens, for example, quite sophisticated systems of laws. Russ: But what does that mean precisely when you say "complete male franchise?" What would be the range of decisions that people would be making, voting, etc., where that would come into play? And how do they take place? And pardon my ignorance. Guest: No, no, not at all. The basic way, if we are thinking about Athens in the classical period in the 5th and 4th centuries B.C., the way that the Athenians as a democracy made their decisions was that first a representative body, a council, that was chosen by lottery for a one-year term, would set an agenda, decide what it was important for the Athenian state to make decisions about; and they would then announce this agenda. Several days later there would be an assembly of the Athenians, would be called in the center of the main city of Athens. And at that point any citizen--that is free adult male native of Athens over age 18--could come to the assembly, typically about 6000-8000 of them did come to the assembly--to debate what they should do. This ranged all the way from setting taxation levels to war and peace to a constitutional amendment, to sort of day-to-day business: whether they should raise the stipend for the war orphans, and so on. Russ: And how would that decision ultimately get made? Guest: The decision was made by majority vote. The lottery-chosen president of the assembly gets up and says, through a herald: The council says that what we should be discussing is, you know, the war orphan stipend. The recommendation of the council is that it stay the same. Who of the Athenians has advice to give? And if it's some minor matter, the Athenians might say: We don't really have much to talk about; we think the council made a perfectly reasonable judgment; and so they would pass it by acclimation. But in the cases of something really difficult like war and alliance and so on, there would be a number of speeches by people from the floor, as it war, identified by the president and allowed to speak for as long as they were relevant. They were shouted down by their fellow citizens if they weren't being relevant. And then after those who wanted to speak had had a chance to speak there was a vote on the measure. And the majority decided. Russ: And the vote would be among the people who were present? Guest: Among the people who were present. That's right. So if you cared about the agenda item, which was, once again, circulated in advance, you would make it your business to be present. And your vote then was registered with exactly the same weight as everybody else who was present. Russ: And who, to take an issue of modern political science that's crucial--who controlled the agenda? So, if the council said, let's keep it constant, and somebody else said, let's increase it 10%; no, someone said we ought to increase it 20%; no we ought to decrease it 20% said someone else. How was that vote structured? Guest: Yeah. So, we certainly know about how the council's initial recommendation was made. And what we know from the inscribed records of these things is that there were in fact amendments from the floor which were accepted. The general assumption is that there are subsidiary votes--basically that if the council is not comfortable with the amendment--if it is comfortable with the amendment then it's a friendly amendment and presumably we just go on and vote on the amended suggestion. If the council says no, then this got to be a vote between the two possible measures that are on the floor. So, the council's and the potential amendment. These intermediate votes--and in fact most of the votes--in the assembly were by estimation of hands in the air. It's fairly rare that they actually have to take a vote by pebbles, by actual count. In most cases majority was clear enough by estimation of hands held up. Russ: No hanging chads there. Guest: No hanging chads. Nothing we hear about anyway. Once again, the Athenians are very aware of their own system. There's a lot of political theory written in Athens. We don't hear objections about this kind of voting system. So, it seemed to work pretty well for pretty much everybody, at least as far as the records are covering everybody. Russ: So. Of those thousands of states, what proportion do we have a pretty good idea of what their governance structure was? Guest: We have about a quarter of them. We know we have some record of their government structure, between a quarter and a third. And what it looks like is that democracy is increasing between the 5th century B.C. and the 4th century. That's when we really have decent records at all. So, it looks like when we're getting near to the end of the 4th century, B.C., something like half of the Greek city states were probably democracy. Not necessarily democracy in the full and robust Athenian sense, but democratic enough to be called a democracy by Aristotle and those who tried to categorize it. Russ: We're going to talk a lot about Athens in particular; that's an example we know a great deal about relative to the others. Guest: Yeah. The Athenians just left a lot of records and a great number of Greek writers were resident in Athens, so we have much fuller records from Athens than anyplace else.
15:32Russ: So, let's talk about Tellus of Athens. Is Tellus a common name? Guest: Tellus is not a particularly common name, no. We have other examples of people being called Tellus, but it's rare enough that it would be distinctive to a Greek audience. Russ: So, you have an example in your paper of Herodotus talking about Croesus, who was some say the richest person in the world at the time, which is where the expression "rich as Croesus" comes from. And Solon, who is a law-maker, a legislator, right? Guest: Yeah, he was a sage. A wiseman who had actually served before his visit to Croesus, the King of Lydia, as a law-giver for the Athenians. There had been a crisis in Athens, came close to civil war. And Solon, famously, solved the immediate crisis and made some of the first legal changes in Athens that eventually develop into full democracy. And after he had finished that he goes off on this trip and decides he wants to see the world, so he ends up in the court of Croesus of Lydia. Russ: And "Solon" is occasionally used--a little bit old fashioned now, but it's occasionally used to mean a politician in headline writing. Because Solon is shorter than politician. Guest: Yes, that's right. It's one of the cases of like Kleenex or something, a private name gets used for a whole category of things. Russ: Poor Solon. But tell us the story of the conversation between Croesus and Solon that Herodotus relates, because it's a nice piece. Guest: He just says that Solon, in his travels, comes to the court of Croesus, and Croesus says: Ah, you are Solon, you are reputed to be very wise; let me give you a tour of my palace and my treasury rooms. And he does this, and having done that, he says: Well now, Solon, I just have one question for you. Who is the happiest man in the world? And Herodotus sort of interjects here. Croesus expected him to say: Croesus. Russ: No doubt. It's a trick question. Guest: Yeah. A very loaded question. And Solon says: Well, since you ask, the answer is Tellus of Athens, my compatriot. And Croesus is extremely taken aback by this and he says, well what's so happy about Tellus? And so he says, well, Tellus is a man who lived in reasonable prosperity and his city was reasonably prosperous during his lifetime; he had children and all of them lived to adulthood and all of them were fine and all of them had children. And near the end of his life he joined an expedition against invaders into Athenian territory; he helped to drive back the enemy; he was killed in battle and he was buries at state expense with great honor. And he says: That's the happiest life a person could live. Russ: And I think he then says: Who's the second happiest? And he then names somebody else. And keeps going down the list; he doesn't get to Croesus. Guest: Exactly. And Croesus says: All fine and well, but tell me who is number 2? And Solon says: Oh, well, it's these other two guys, these brothers named Cleobis and Biton, from Argos, and it turns out they are super happy because when the family ox cart, which was supposed to take their mother to a religious festival wasn't able to do that because the oxen were for some reason held up in the fields, Cleobis and Biton lashed themselves to the ox cart; they drove their mother to the festival; everybody said: That's fantastic, look at these kids drawing as oxen. And the mother was so happy that she praised to the gods that they should have the finest gift that any mortal could hope for. They go off to a temple after that to give thanks; they lie down in the temple, and both die. Peacefully. And afterwards the people of Argos are so impressed by this they put up statues of them. So, those are the second-happiest people. Once again, a story of people who are clearly of moderate, wealth. That is, they have oxen; their mother is involved in festival activities and so on. But obviously not anything like people of the wealth of Croesus. Russ: And in fact, are chosen presumably because they are nothing like Croesus. Guest: Exactly. So, the whole point is that to really have a happy life, you have to know what happiness is, and also, as Solon says, you have to have completed a happy life--that your life can never be judged happy until it has been completed. But his real point, I think, the one that is important for us thinking about Greek economics, is that happiness is not to be judged by great masses of wealth alone. Happiness is to be judged by an adequacy of wealth. He doesn't think you can be happy--at least none of these stories suggest that you can be happy if you are living in genuine dire poverty or hunger, badly housed. But he does think that the bottom line of having moderate wealth, which seems to be well-above living at subsistence, is the foundation for the kind of special happiness of having all your children live, having your grandchildren be good, being buried with honors, being honored after your death. These are all special things that build from living a life of moderate wealth in a moderately wealthy community.
22:19Russ: Well, I wanted you to tell that story; and the rest of it is actually quite good as well, as to what happens to Croesus at the end of his life; but we'll leave that for another podcast. But one of the reasons I wanted you to tell it is that your paper has a line that I don't get to encounter very often, which is: Tellus of Athens did not shop at Walmart. So, I cherish that line. You are making that line that in some sense Tellus, who is a John Doe of Athens, just an average guy, obviously doesn't have the command over goods and services that a modern American does. But for his day, may have been, even though he was just maybe typical, quite comfortable. And that's where you start with your analysis. Guest: That's right. So, the question is: If somebody who can be imagined as having this kind of moderate wealth, able to raise a number of children, they are healthy, they too able to have agricultural resources, oxen out in the field, and so on--that that's the kind of baseline of living well beyond bare subsistence. That if that were generalized, it would suggest that Hellas, the ancient Greek world, was a wealthy place indeed by ancient standards. Russ: But of course Hellas is only one data point. That's just a starting point. Give us what evidence we have that the average person in Athens was actually quite comfortable and maybe was doing better as time passed; there was economic growth. Guest: Yes. So, basically we have three kinds of evidence that we can look at. One is demographic. So, we can measure at least roughly how many people there were in the Greek world at any given time, and then what their distribution was in terms of urban and rural and so on. To cut to the chase, by the time we are down to the period of about 300 B.C., what it appears is if we've got something like 7-10 million people in the Greek world; about 3.5 million people inside of core Greece, roughly the modern nation state of Greece. We can then compare that number to the earliest Greek census, excluding the various districts that have come into the Greek state since the 19th century. What we can show is that basically the ancient Greek population was higher than the late 19th century population of Greece. It's pretty clear that the late 19th century of Greece was living right about at agricultural carrying capacity--that is, the amount of food that could be produced within the Greek territory to feed the number of people who lived in Greek territory. And so assuming that we've got our numbers right, and I think there's good reason to think these numbers are at least roughly correct, the ancient Greek world lived well beyond the carrying capacity of the territory that the Greeks inhabited. And that means they were importing a lot of food from outside. So, all of this suggests that they weren't simply a baseline subsistence agricultural economy. They were actually making things, goods and services, which were being exported so that food can be imported. So, that's the first, sort of, demographic story. The other part of the demographic story is the Greek world is highly urbanized. Probably something like 30% of Greeks living in towns of more than 5000 people. Which is just extremely urbanized, once again by ancient standards. If we compare that to the Roman Empire, which is the standard highly urbanized example from antiquity, it's probably about three times the urbanization rate of the Roman Empire. So the very fact that there were a lot of Greeks, that they were highly urbanized; and then that they seemed to be quite healthy. The bone studies that have been done on bones of Greeks from graves from this period suggest that in fact over the period we are talking about, from say about 800-300 B.C., the health of the Greeks really increased. Which is striking, because the population becomes denser; and as the population becomes more urban, we'd expect for higher levels of disease, which is typical of early Europe for example. The cities were just death traps, and as you get more urbanization you get a decline in health. That seems not to be happening in the Greek world; seems that we're getting denser populations and also healthier populations. So, that's the first part of it; that's the demographic. Russ: What about the direct evidence, per capita consumption and wealth? What do we know about that? Guest: Right. So, to look at wealth and per capita wealth, we have to look at indirect proxies. One of the best indirect proxies is the size of houses. This is my colleague, Ian Morris, did a terrific study in which he was able to show that Greek house size increases just dramatically in this same period from about 800-300 B.C., so that by the time we are down to about 300 the Greeks are living in housing that are comparable, in floor plan anyway, to suburban American houses, several hundred square meters. So, there's a really steep rise in the size in houses. There's a comparable rise in various other kinds of goods that we can less accurately measure--burial goods, from destroyed houses, household goods, and so on. At any rate, the house size, household goods, along with anything else we can measure, for example the number of coins in circulation, all seems to be going up really dramatically in this period. And then the third is that when we look at wages and compare wages in the one place where we really have wage information, and that's Athens, the wages in ancient Athens are exceptionally high by ancient or any pre-modern standards, well over subsistence. In fact, comparable to wages in say golden-age Holland, 16th, 17th century.
30:24Russ: So, I'm a little bit worried about that coin data. The number of coins in circulation might only tell you that there was inflation, which might mean that prices were high, so that high wages didn't buy very much. Do we know anything about--when you say wages were high, do we know anything about the command of wages over goods and services, not just their absolute level? Guest: Yes, we do. But what another one of my colleagues, Walter Scheidel, has done is translated the wages for a number of pre-modern societies into the so-called wheat wage. This is a standard approach for looking at pre-modern incomes. Basically what you do is say how many liters of wheat can one day's wage purchase. And then you figure out--those liters of wheat represent both food consumption and housing. But it's a weighted standardized measure across both cultures, and so it's pretty clear in this wheat wage where the subsistence level is and the standard ancient, pre-modern wheat wage is quite close to subsistence. So, obviously you can't live below subsistence; you can't live just at subsistence. But as expected from any kind of extractive economy most people will be living just a little bit above subsistence. So, we can then work at multipliers, and it looks from the Athenian evidence that the Athenians are living at several times--two and a half times--above subsistence. Which again is just an absolute standout when we compare this to other societies. Russ: So, when you say "the Athenians," you are talking presumably about a fairly diverse group of people that we have wage rates for. Guest: Yeah. The nice thing is the information we have--this is especially for people doing menial labor in construction projects. The wages are differentiated in the accounts based on whether the individual is a free citizen or a foreign resident or a slave. And in fact the wages are all the same. They differentiate between who was getting paid by their status but the differentiation--we don't get wage differentials. So it looks as if we've got the wages for pretty much a cross-section of the Athenian population. Russ: At least at a particular skill level. Guest: Right. So what we don't have is the wages for example on what an unskilled agricultural laborer would have. These are people hauling stone and so on, so these are not high-end artisans. Russ: So, as an economist my first thought would be to think about the division of labor. So, if people's tasks are not very specialized, if you are a jack of all trades, if hauler is your profession, it seems unlikely to me you are going to live 2 or 3 times above subsistence level. Guest: Yeah; that's the surprising--there's the result. We get that kind of thing for unskilled labor. We get those kinds of similar sorts of wage levels in England and in Holland in the 16th and 17th century. So, it's not unheard of in pre-modern societies. But it's rare. So, yes, that's exactly it. It seems startlingly high. Once again, you can say you don't believe the evidence, but the evidence is what it is, and it all seems to be quite consistent with everything else we know about how much a citizen is paid to attend the assembly for one day and so on. So, it's pretty hard to get rid of the result, I think. Russ: Putting aside the hauler, low-skill wage, is there much evidence of a fairly fine division of labor anywhere else in Athenian society? Guest: Yeah. There's a lot of division of labor. This is something that's in fact noticed by the Greeks and is commented on theoretically by the Greeks. If you read Plato's Republic, when he is setting up this idealized society, he spends a surprising amount of time at the very beginning talking about how you've got to have division of labor: they are going to have to have specialization in terms of some people growing food and other people working as blacksmiths and other people serving as military specialists and so on. So, there have been some studies just that have tried to collect the number of names for particular occupations that we have in the Greek world, and there's hundreds and hundreds of them. So, the Greeks were very aware of their society as being actually divided into quite a lot of particular kinds of skilled specialization. Russ: The other thought I'd have is that when you have large wage differentials, say, between a low-skilled worker in Athenian society and an agricultural worker somewhere nearby, usually you expect there to be migration into the higher-wage occupation. Guest: Exactly. So, this I think is at least part of the explanation for the ongoing Greek use of slaves. So, this is of course one of the moral blots on the Greek account, that it is a slave society and they do import slaves from outside the Greek world, as well as enslaving other Greeks as prisoners of war on occasion. But I think that one of the reasons that they do in fact import slaves is that they need more labor. And so we actually do have labor inflows into the Greek world from outside. Russ: I was thinking more if I were a farmer living at subsistence in one of the 999 other states outside of Athens and I hear about the good wages there and I think, boy, I'd like to do that better than what I do now, are there barriers to that kind of movement? Guest: Yeah, so here's the--the problem is we don't have wage evidence for these other Greek states. But Barry Weingast, my colleague in Political Science, and I have been doing some studies just trying to model what the likelihood would be that wages in the rest of the Greek world would approximate what we see in Athens. Because exactly as you suggest it seems highly implausible that in Athens we'd have this relative high wages and that there would be just bare subsistence in these nearby states. After all, in the Greek world migration across state borders is actually quite easy. Fairly low cultural costs--you all speak the same language, roughly the same religious traditions, and so on. And the Athenians anyway, and we believe other Greek states as well, are quite happy to have foreign residents as long as they register and pay a low per capita tax.
39:39Russ: You think it was possible for a newcomer--I mean, in England, for example, it was quite difficult to show up in a town in the Middle Ages and go work for somebody. They weren't very eager; they were worried about the poor laws. Guest: Yeah. We don't seem to get a lot of concern about this in Athens, interestingly enough. In fact, there is a lovely little treatise by Xenophon, which is sometimes translated as "Ways and Means" or "Forms of Income," and he's basically trying to think about ways the Athenian state can increase its revenues. And he suggests that the Athenians could be even more welcoming to foreign residents, especially for people who engaged in trade. And he suggests various ways in which this could happen. What's interesting is that it looks as if the Athenians are passing laws in this period, the middle of the 4th century B.C., to in fact encourage more people to come into Athens. Especially traders. So, this may not affect these unskilled laborers. Russ: Do we know anything about trade and trade levels? So, for example, obviously there was some trade between Athens and other Greek cities. How much trade was there between Athens and other countries. Guest: Yeah. It's very hard to measure it. What we do have is some measures for the grain trade between Athens and the area that we would now call the Ukraine, especially south Russia. So, we know there is a lot of grain being imported into Athens, at least in many years. Maybe some years in which the Athenians have good enough crops locally that they don't need to import a lot of grain. I tend to think they are importing a great deal of grain every year; and I think that that's also typical of other Greek states. That's that demographic evidence that we were talking about. Russ: What do you think they are exporting? Guest: We know some of the things they are exporting. They are exporting pottery, olive oil, wine. They are exporting expert warriors: there's a lot of mercenarism in this world. They are exporting other kinds of highly skilled experts--we hear about doctors and so on. These are people who are Greeks who are working outside of the Greek world. Architects. I tend to think there is a lot of export in textiles. Unfortunately textiles don't leave any archeological record, so that's very hard to trace. There's also probably a lot of export of fine manufactured goods in bronze and silver, but once again those tend not to leave traces unless they are found in shipwrecks. Bronze and silver tend to get melted down and reappropriated.
43:18Russ: So, I should mention, the paper we are discussing was published as your Presidential address in 2010 of Transactions to the American Philological Association. And Philology is the mix of history, linguistics, and classics. Is that correct? Guest: Yeah, that's right. Philology was sort of in some ways the old way of talking about the field of classics. It means love of language or love or words, but it now really covers a much wider range, that's exactly right--history, archeology, literature, and language. Russ: Culture, I guess, generally? Guest: Yes, culture, broadly speaking. Russ: So, if we take this as given, which is of course hard to know with precision, but we have some evidence that Greece was prosperous in this period, what do you think explains their prosperity relative to their neighbors. Guest: Right. Well, this is the big question and we can make hypotheses. But I think we can come up with some reasonable hypotheses. So, I would identify two major areas. One is relatively egalitarian institutions. That is, relatively fair institutions that allow individuals to engage in exchange of various sorts on a relatively equitable level. The egalitarian institutions--and when I'm saying this, I don't mean redistribution all the way down. Basic fairness in terms of opportunity. This has two results. One, it lowers transactions costs, because when people believe that when they have a dispute with somebody with whom they are engaged, the dispute will be resolved fairly. It's not that the nobleman will always win and the villein will always lose. So, it lowers transactions costs. It increases the potential then for profitable exchanges. And it also increases investment in human capital because if I don't fear that the proceeds of my investments in myself are going to be expropriated by somebody else--some powerful nobleman, for example, who is going to force me into servitude, then I am willing to engage in more investment and therefore willing to do the kind of training that leads to this sort of extensive specialization that we were talking about a little bit earlier. Russ: How about property rights, generally? How secure were they? If I made a bigger house, which we've been talking about, what's my worry that someone will come along and just take it from me? Guest: You are remarkably secure in your property, at least in the states we know most about. Now, if you have the bad luck to be in a state that is run by a tyrant, it's another story. Although tyranny really declines in the Greek world, I think partly because tyrannies are more inefficient compared to these citizen-centered societies like Athens. But if you are in a democracy like Athens you might think that there was always a danger that the majority would use its majoritarian power simply to expropriate the goods of the rich. But this isn't done. In fact, Athenian magistrates, when they took their oath of office, they had to swear to leave property in the hands of those who currently possess it. Clearly the Athenian state was very aware of the importance of relatively secure property rights. You are going to have social stability and the possibility of improvement. Russ: And that's clearly a rarity in the ancient world. So, when we talk about people like Croesus or Darius--and I have to say, I've spent my whole life pronouncing it Da'-rius, so I'm very happy and I'm sure Darius is. Guest: The Persians would have pronounced it entirely differently. Russ: Okay. I thought maybe I would have been offending him all this time. But these successful wealth-amassers were not great innovators or entrepreneurs. They were tyrants. Presumably they acquired much, if not all, of their wealth through the power of force. Is that true? Or do we know? Guest: Yeah. I think that roughly is true. Certainly it's not just brute force always. In some cases it's what you might call ideological force. So, if I'm an Egyptian, because I believe the Pharoah is a god and I believe that my chances in the afterlife depend on that, I may be willing to turn over a great deal of my produce to him. Russ: Sure. Guest: On the other hand, I'm not going to invest a lot in myself. I'm just going to do what my ancestors had done over and over, and turn it over to him. In other cases--we've got very good evidence for example for the Persian Empire--that it is just raw force. The king and the people immediately associated with him just go out and take stuff from the people. So that property rights seem not to be secure in these other societies. And I think that's part of the reason for the differential, that the Greeks seem to be doing so surprisingly well.
49:30Russ: So, you talk about the rule of law and access to the economic system. Anything else you want to add? Guest: Well, I think, yes. I think the second really big reason is that we get a constant, especially institutional, innovation in the Greek world. It's quite remarkable, the level of ongoing institutional and to some degree technological, but especially institutional innovation. And I think that part of the reason for this is that there is a high level of competition between these many hundreds of city states. And there's also quite easy technology or institutional technology to transfer across city states because you have a shared language, shared culture generally. So, you've got all of this competition to try to get a leg up on your rival neighbor state. And the possibility of borrowing an institutional innovation that is working out pretty well in that neighboring state is really pretty high. So, we can see things like the spread of coinage early on. Coinage is only invented twice in world history, once in the Greek Lydian world and once in China. And we just see that within 50 years, the use of coinage just sweeps across the Greek world. Very efficient way to do business, lowers transactions costs. And I think it's just an example of an institutional innovation that has been spread quickly across the entirety of the ecology. And ditto, for that matter, democracy. I think this is why forms of democracy increase in the Greek world, simply because it was working pretty well. It was helping to increase effective mobilization, ultimately lowering tensions between haves and have-nots--the wealthier and the less wealthy in the society. And generally moving to the more effective both in the military and on the economic side than the competitor regime types. Russ: But that innovation of democracy didn't spread very much beyond Greece. Guest: No, it's very hard, and you basically have to buy into a lot of cultural presuppositions. For example, just the possibility of equality among native males. Or the value of liberty as free expression or free association. Just the very notion that those things are possible or valuable is really rare in human history. And of course it's not advantageous if you've got a very narrow, small, entrenched elite efficiently extracting a very small but spread-over-a-lot-of-people surplus. So, if I can extract just a little bit above a subsistence from a great number of people, and there are only a few of us who are doing it, we've got this system locked in; somebody comes and says: Hey, the Greeks are doing this democracy thing. I'll do my best to avoid that at all costs. Russ: Yeah. The podcasts we've done with Bruce Bueno de Mesquita touch on this issue, and also with Daron Acemoglu. You'd think you want to make the pie as big as possible and take a big slice of it, but of course you can't always get a big slice of a big pie. So you might be willing to settle for a smaller pie. Guest: Exactly. As long as you are getting your big piece. If there are a dozen families dividing a small pie, there are going to be still doing pretty well. If there are 10,000 families dividing a much bigger pie, the slices are smaller. Work it out, I'll say: I'll stick with the dozen of us, thank you very much. Russ: Change is risky. Guest: That's right, exactly.
54:07Russ: So, how has your thesis been received by other scholars? Are there people with a vested interest in arguing that Greece was poor and they are pushing back, arguing your data are wrong and your evidence is misleading? Guest: Yeah. There is a certain amount of to and fro at this point. The wealthy-Hellas thesis has been received well, especially by people in economics, trained in economics. There are some people studying the Greek world who resist the thesis or who push back against it. I tend to think that they are not really--at least I haven't seen yet--any detailed arguments that say that the evidence is wrong or the interpretation is wrong. The preference at this point is simply to say: Well, after all, Greece was a pre-modern society, and pre-modern societies were all pretty much alike, and therefore we prefer to believe, we just don't believe the evidence because it can't really be true. Because of the premise that all pre-modern societies are pretty much alike. On the other hand, there's sort of a nostalgic vision of the Greeks as being these noble, impoverished folks, who are to be revered because they rejected materiality and embraced spiritual lives and on the one hand democracy, on the other hand truth and beauty and so on. And so those people don't want to think of the Greeks as being engaged in this kind of sordid-- Russ: Crass-- Guest: Material--exactly. But I think really actually if we care about what some people call the Greek miracle, the explosion of culture, invention of various cultural forms, Tragedy, history, philosophy, and so on, then we really should be interested in its cultural basis. And material basis is one that I try to describe. Russ: Yeah; it seems to me as an economist thinking about this view that the Greeks sat around on the ground all day talking about the meaning of life and truth and the essence of things if anything points to their wealth. Most people don't have time in those years to sit around on the ground and to do sculpture-- Guest: Yeah, exactly-- Russ: And to hang out in political gatherings and chit-chat about the latest agenda item. To me that suggests that they had leisure time, which is perhaps the greatest evidence of high consumption. Guest: Yeah. And I think that's exactly correct. The other sort of pushback comes from people who want to say that the Greek world is an example--certainly true--of a slave society, and want to say that slave societies can never have economic growth. That they are doomed to a kind of stagnation because they refuse to innovate, won't get any investment capital, and so on. But I think this is just--it's in some ways a moral argument rather than an economic argument. I quite agree with the moral argument. Slavery is monstrous. But on the other hand, I don't think that it is evidence for stagnation in and of itself. Russ: But surely some people have argued that your data is representing the exploitation of the slaves. Is that not what you've received? Guest: Yes. This is one of the questions: is this simply a case of exploitation? And the response to that is: There certainly is exploitation of slave labor in the Greek world, although perhaps less ferocious exploitation based on the evidence of the Athenian wages, that slaves are receiving the same wages as free people. But I think the exploitation argument would have to suggest that somehow the Greeks were more exploitative than other peoples in the ancient world who used slaves. And I just don't find much evidence for that, that somehow they managed to extract more surplus from slave labor than other peoples. It's just hard for me to model how you'd do that, how you'd actually get more surplus when it's largely unskilled versus semi-skilled slave labor than other societies. But maybe I'm just missing something. Russ: Do we know anything about how widespread slave-holding was at the time and what proportion were slaves? Guest: This is much debated. The problem is, is that there are no records that are meaningful for this; and there really can't be, because clearly the Greeks never knew how many slaves they had. There's no registry of slaves. There was a registry of foreign nationals, because they paid a tax. But slaves were not registered. So the best guess is that, if we look at Athens, something like a quarter to a third of the population might have been slave, which is a very high percentage, but that's just really a guess. Russ: And do we know anything about how they were treated, what rights they had, if any? Because that would also be relevant. Because, when we hear the word "slave", we often have a certain--Americans tend to think of the American south. Is that the right model? Guest: No, it's not a race based slavery at all. Russ: I meant, in terms of property and ability to tell them what to do, when. Guest: Right. It is chattel slavery in which the slave is treated as property and therefore can be bought and sold, so it's not--there are forms of serfdom in the Greek world, but a lot of it is chattel slavery. But there are, at least, once again, in Athens, where our best evidence comes from there are laws which govern the treatment of slaves. So there's a law against deliberate insult, for example, that specifically says you may not insult anyone, either male or female, adult or child, free or slave. We know that at least some Athenian slaves didn't live with their masters; they actually had their own residences, lived on their own, and simply paid part of their income to their master. We know there was also substantial manumission of slaves: you could buy out your bondage, as it were, especially if you were one of these people living off on your own. So it seems to be, in some ways, sort of less horrific than the kind of slavery we associate with the American south. But I wouldn't want to in any way lesson the moral horror of slavery. Clearly it was an undesirable condition, and the Greeks never kidded themselves about that.
1:02:37Russ: Finally, talk about what new evidence or data might come to light that could settle some of these issues. You work in a strange field, to an economist, if I may say so. You don't have a lot of census data, or CPS data, or BLS data. You're stuck with what gets unearthed, and that's an erratic process. So as a scholar in this area, what do you hope for, and what do you think might be, in your dreams, what might come forward to help understand these issues better? Guest: Yeah. Well, there's always the hope for more good archaeological evidence, and there is every year more archaeological evidence. And archeologists are increasingly focussed on quantification. Instead of just finding a beautiful temple and putting it back together, and bringing in the tourists, they're now actually realizing that counting the number of stamped amphora handles--amphorae were the trade vessels stamped to indicate the place of origin of the goods--so we're getting increasingly large bodies of data, and of course the techniques for analyzing very large bodies of data are getting more sophisticated all the time. We always hope for new documents, especially from Athens--the Athenians were sort of document mad; happily, they liked to carve a lot of records on stone tablets, and those got lost, and are found again by archaeologists--so a certain number of new inscriptions on stone, often with very important data for us, come up every year, and are very carefully ordered and analyzed by archaeologists. One area that I think is really going to be important going forward is better and better osteology, data or analysis of bone remains, so we can measure more precisely longevity, health, figuring out what people actually died of, at what age. If we can model the demography of ancient populations, both Greek and non-Greek populations, we'll be able to do much better comparative analysis of things that are, at least, very good proxies for economic growth over time.

[Our thanks to Alessandro Sisti for assistance with the Highlights.--Econlib Ed.]