WAS THERE A MARKET ECONOMY IN ANCIENT ROME? One of the unsettled questions in economic history is whether the Roman Empire was a market economy. Arnold Kling (whose always interesting economics blog is here) writes here that he agrees with Karl Polanyi that market economies are relatively recent developments. He thinks that there were not many people in ancient Rome regularly producing goods for trade and that “the markets in ancient Rome were filled whenever the legions came home with loads of plunder.” Kling also thinks that what he calls “hegemony”, a power that could protect traders and enforce contracts, was essential for the development of markets. (I think that “hegemony” is another unfortunate example of economists using words that have too many other meanings). I think of trading and markets as developing naturally, but in THE GREAT TRANSFORMATION Polanyi apparently argued that “laissez faire was planned” when the nation state developed and that before that there no markets as we think of them.
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Rome had an awfully large urban population. I understand the legion-plunder was vast, but it seems to me that Rome would have to contribute more than this. I don’t know if it was free market – I’m sure a lot of food was simply bought up/taken by the government for the legions and so forth.
But, Rome was really big on luxury items, and many artisans must have worked by supplying these.
Rome’s population ( actually all of Italy’s) could not have been sustained without a vigorous degree of trade and mercantile activity. Italian businessmen ( literally, the allied Italianate cities of the Peninsula before they gained full Roman citizenship after the social wars) were known for their sharp dealing. Not unlike the junior partner relationship of Scot to Englishman in 18th century imperial Great Britain.
Granted, Rome plundered and exacted tribute via proconsular governors but Roman grandees also paid good prices for luxuries and the state bought up surplus grain for the dole. The Mediterranean world was safe for trade ( after piracy was exterminated by Agrippa) and the Celt could buy and sell with Greek or Iberian or Egyptian. Money circulated with a velocity that was not seen again until the early modern period.
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