Economic growth in the Roman Empire
Studying the ancient Roman economy will always be a challenge due to the lack of evidence. There are no government accounts, central records of taxation, systematic assessment of trade and manufacture, and no ancient analyses of economic phenomena. We can get information only from proxy data, which must be interpreted through economic models. Notwithstanding the above, an assessment of whether the Empire experienced economic growth poses two problems. Is there evidence for such a phenomenon? Can it reasonably be integrated into the overall economic system?
Economic growth is the ‘sustained increase in wealth over time (normally per year) measured in the real pro capita production of goods and services’[1]. This definition distinguishes between ‘aggregate growth’, which could simply be a consequence of the Empire’s increased population, and ‘per capita growth’, which indicates an increase of production proportionate to the number of people. The definition also offers the idea that the increase in wealth must not be a one-off. This would be made possible, for instance, by a year of very good harvests or the redistribution of war booty. Growth must be sustained over time, implying that there must be economic structures capable of sustaining it.
The Ancient Roman economy was primarily based on agriculture, carried out by means of relatively backward technology. Industry and trade had limited importance. Economic growth cannot easily be integrated into such model if, looking at it from a fully primitivist point of view, we interpret it as completely static. But it is possible to see in it a degree of dynamism and a tendency toward progress and trade, which would justify economic growth.
The core of the problem, therefore, is to determine whether the Roman Empire had room for industry and trade or whether it was, essentially, a subsistence economy characterised by cellular self-sufficiency. Some indirect evidence suggests that the early Empire might have brought about some economic growth, facilitated by the extension of the market and political stability. For instance, an increased number of shipwreck finds suggests that shipping activity and movement of goods were particularly intense in the first and second centuries.
An analysis of ice cores in Greenland and various measurements of atmospheric lead in sediments at the bottom of lakes, forest soils and peat bogs show that European atmospheric lead pollution began to rise around 500 BC, reaching its peak in the first century CE. Since lead is a major component of silver smelting, this increased pollution might have been the result of expanding silver production, and an increased production of silver points to an increased monetisation of the economy. [2] We also have non-negligible evidence of technological advances, for instance numerous finds of olive lever-presses (expensive items allowing a large production of olive oil) in North Africa. 2
How can we make sense of this apparently intensified and more advanced economic activity in the wider context of an ancient economic system? Does this evidence point to economic growth? If it does, what provoked such growth? K. Hopkins[3] suggested that although the ancient economy remained to a large extent ‘primitive’, it did offer the possibility for ‘modest economic growth’ and that ‘the size of the surplus produced in the Mediterranean basin during the last millennium BC and the first two centuries CE gradually increased’. Surplus was the first ring of a chain that led to a degree of trade, industrialisation, progress and growth.
Hopkins’ model of growth involves seven elements. The first of these is an increase in agricultural production. Archaeological surveys reveal that during the Principate, new areas were occupied for the first time or exploited in a new way, pointing to an extension of agriculturally exploited territory. This hypothesis is confirmed by counts of arboreal pollen (wild area) and non-arboreal pollen (occupied area). Imperial exploitation was the key to this increase. ‘Agricultural productivity increased above all because of the increased pressure of exploitation’. Slaves were forced to work for longer than free people and were given bigger plots of land than free people could afford. Moreover, the pressure of rents and taxation forced peasants and landowners to produce more than was necessary for their subsistence.
The second element in Hopkins’ model of growth is an increase in the population. This was a natural consequence of territorial expansion, but occurred even in Italy. A census in 70 BC counted 910 000 adult male citizens; one in 28 BC, four million. The gap is obviously exaggerated (due to more thorough census-taking, the enfranchisement of the provinces and the manumission of slaves), but the figures nevertheless do reveal a considerable demographic increase.
Thirdly, Hopkins mentions the increase of the proportion of population involved in non-agricultural production, mostly determined by the increasing number of towns (which is the fourth element). ‘Non-agricultural production rises due to the division of labour’. This can be confirmed by the increased number of artefacts found from Roman times in comparison to pre-Roman times in the Western provinces.
The fifth element, according to Hopkins, is the increase provoked by technology in per capita production. The Principate saw significant technological developments: water mills, water-lifting devices, harvesting machines, olive presses, better amphorae and larger ships. We can also include ‘social innovations’ such as the diffusion of business practices, including corporate work that permits greater productivity than individual work, and investment.
The sixth element– the increase on the proportion of production extracted in taxation and rent– takes us back to the first element: exploitation absorbed part of the production and thus stimulated it. The State saw its size and power increase, and in order to maintain its army, the administrative infrastructure and the expensive imperial court, it exacted more. The State also supported the practice of rich landowners extracting a greater surplus from their tenants.
The seventh element is taxes. Taxes in kind stimulated long-distance trade, since the income was spent mainly in Rome and along the frontiers where the armies were stationed. Monetary taxes compelled tax-payers to convert their produce into cash, which also stimulated trade.
Hopkins concludes by stating that these seven elements ‘taken together imply that, overall, in the first and second centuries CE, total production, consumption and trade were greater than in the previous and subsequent centuries’.
Other elements might have created opportunities for economic growth. One of these is the Mediterranean climate, with its high variability of rainfall and crop yields from year to year and from region to region. Some areas of the Empire were often faced with food deficiency, which constituted a strong motivation for trade. Another strong motivation was the Pax Romana that made commercial exchange much easier, thanks to the absence of considerable military disturbances, the predictability of tax-burdens and the recoverability of loans. The Mediterranean had been freed from pirates, the major roads from brigands, and the imperial domination introduced a shared currency, a common scale of prices, standard weights and measures, and a common set of laws, which were most effective in lowering transaction costs. As Hopkins puts it, ‘… all might have contributed to substantial increases in productivity in some pockets of the ancient economy, and perhaps to marginal increases in average productivity overall’.
We can also notice that the long-term presence of the legions in provincial territory was likely to encourage local production, as the vici near the military camps would provide facilities for the soldiers, through taxation in kind or purchase.
The landowning elites also played an important role in the intensification of economic activity. Rich aristocrats owned large agricultural estates that not only supplied the owner’s household but also produced a marketable surplus. In Italy, for example, villas were concentrated in coastal regions, where exportation would have been easier.
Another fundamental element is urbanisation. Rome had one million inhabitants. It was an important centre of production and demand, with a large commercial network involved in its supply. There were hundreds of thousands of inhabitants living in provincial capitals with such as Alexandria, Antioch and Carthage, and many other non-negligible agglomerations. Urban economy is a key to understanding ‘…to what extent wealth generated from agriculture contributed to an expansion of production in the non-agricultural sectors of the Roman economy’ according to D. Kehoe (‘The Early Roman Empire: Production’ Chap. 20 of the Cambridge Economic History of the Greco-Roman World). The main stimulus to growth in the urban economy was the need of the landowning elite to market their surplus. This created opportunities for generating wealth in supporting industries (ceramic vessels, ship-building, etc.), and at the same time sustained the manufacturing enterprises which responded to ‘the aggregate demand of small landowners, tenants, and other agricultural labourers’. For instance, ceramic industries, which provided rich landowners with the containers for their wine, would have taken advantage of the increased purchasing power in the countryside resulting from the production of exportable goods by also producing items for local everyday use.
Undeniably, there were numerous opportunities for growth in the first and second centuries. However, despite the wide market and the favourable conditions, growth was limited. First, its limits can be seen in the use of technology. Let us take, for instance, the olive press. While it could have provided fairly large-scale production (as mentioned earlier) its dissemination was modest and the old lever press continued to be used. The same can be said of the vallus, the Gallic reaping machine. It allowed wheat to be harvested much more quickly than by hand, but it was seldom used. Since the technological innovations were neither widely received nor fully exploited, we might presume that there was no particular drive among agricultural producers for a substantial increase in productivity. Their conservative attitude toward climate instability is a significant example: ‘we can notice that the most common way to reduce risk was not to invest in labour and resources to improve yields, but in the diversification of crops’[4], and in the purchase of estates in distant regions.
A modest but solid income derived from the rent of multiple estates was the landowners’ aim; a dynamic and risk-taking attitude and a striving for high productivity was against their culturally-induced habits. If traders happened to gain sufficient profit from their enterprises, they invested it in land, hoping to join the landowning elite.
The supremacy of agriculture over trade had a moral dimension. Very telling are the words of Cato in the preface to his De Agricultura: ‘It is true that to obtain money by trade is sometimes more profitable, were it is not so hazardous; the trader I consider to be an energetic man, and one bent on making money but it is a dangerous career and subject to disaster. On the other hand, it is from the farming class that the bravest men and the sturdiest soldiers come.’ Social conservatism enhanced the economy’s ‘primitivist’ approach aspects.
We can also see this phenomenon at work in the urban economy. The urban economy was certainly a stimulus to production and commerce, but its importance can be played down, if we adopt M.I. Finley’s view on urbanisation and see the town less as a ‘centre of manufacture or commerce’ and more as ‘a consumer city’. Towns did create some opportunities for non-agricultural production and trade, but this was not their principal function and raison d’être. ‘Urbanisation was more a reflection of a cultural pattern than of economic growth’, this pattern being the habit of aristocrats to own agricultural estates, live in town, and spend their rents. It is also important to underline that their expenditure were not based on saving, accumulation and rational investment (principles proper to an industrial bourgeoisie), but on the ostensible consumption of a stable income. ‘We should not automatically assume that the high level of Greco-Roman urbanisation was an index of its high economic development’. [5]
The reluctance of upper classes to invest in the manufacturing sector on a large scale limited the capital available for its growth. Their involvement was mainly reduced to furnishing raw materials from their estates. ‘A key factor affecting the development of manufacturing, both in the cities and in the countryside, was the level of wealth in the hands of small landowners and tenants’[6] . Their capital, far less than that of the aristocracy, maintained industry on a modest scale. Further, their earnings from industry and trade tended to be converted into land.
Although we can find both evidence and explanations for a degree of economic growth during the Principate, this phenomenon should not be exaggerated. It was more due to a combination of circumstances brought about by the new political realities and the expansion of the market than due to a natural development of a system structurally tending toward long-term economic growth. Indeed, demographical prosperity and intense economic activity become much scarcer after the second century.
The ancient economic system, based on conservatism and stagnation, was not structured to generate and sustain growth. Progress and risk-taking were not part of the ancient mentality. ‘Classical man did not behave like economic man’.[7]
Works cited
Hopkins, K, ‘Introduction’ page xiii, in P. Garnsey, K. Hopkins, C.R. Whittaker (eds.), Trade in the Ancient Economy (London, 1983).
Millett, Paul, ‘Productive to some purpose: the problem of ancient economic growth’, in D.J. Mattingly & J. Salmon (eds.), Economies beyond agriculture in the classical world (London, 2000).
Kehoe, D, chapter 20 in W. Scheidel, I. Morris and R. Saller (eds.), The Cambridge Economic History of the Greco-Roman World (Cambridge 2007).
[1] Paul Millett, ‘Productive to some purpose: the problem of ancient economic growth’, in D.J. Mattingly & J. Salmon (eds.), Economies beyond agriculture in the classical world (London, 2000).
[2] D. Kehoe, chapter 20 in W. Scheidel, I. Morris and R. Saller (eds.), The Cambridge Economic History of the Greco-Roman World (Cambridge 2007).
[3] K. Hopkins, ‘Introduction’, in P. Garnsey, K. Hopkins, C.R. Whittaker (eds.), Trade in the Ancient Economy (London, 1983)
[4] D Kehoe, chapter 20 in W. Scheidel, I. Morris and R. Saller (eds.), The Cambridge Economic History of the Greco-Roman World (Cambridge 2007).
[5] K. Hopkins, ‘Introduction’, in P. Garnsey, K. Hopkins, C.R. Whittaker (eds.), Trade in the Ancient Economy (London, 1983)
[6] D Kehoe, chapter 20 in W. Scheidel, I. Morris and R. Saller (eds.), The Cambridge Economic History of the Greco-Roman World (Cambridge 2007).
[7] K. Hopkins, ‘Introduction’ page xiii, in P. Garnsey, K. Hopkins, C.R. Whittaker (eds.), Trade in the Ancient Economy (London, 1983).