Posted on 01/07/2002 11:53:33 AM PST by Oxylus
Ancient traders suffered boom and bust
Alexander the Great's death plunged Babylon into economic turmoil.
7 January 2002
JOHN WHITFIELD
Ancient Babylonian trading markets were as volatile as our own, says an economic historian. Prices of agricultural goods in the city fluctuated hugely, and the death of Alexander the Great triggered two decades of economic instability1.
Babylon's main temple employed scribes to record the city's business. They noted on clay tablets how much barley, dates, mustard, cardamom, sesame and wool one shekel of silver - just under 8.5 grams - would buy.
Peter Temin, of the Massachusetts Institute of Technology in Cambridge, Massachusetts, analysed 3,000 surviving price records for the period between 464 and 72 BC. "They're probably the best data that we have from the ancient world," he says. The tablets also record astronomical observations, allowing modern researchers to ascribe precise dates to the deals.
The records reveal economic upheaval in the years that led up to 300 BC, after the death of Greek emperor Alexander the Great. Alexander, whose empire stretched from his native Macedonia to India, conquered Babylon in 331 BC. He died of malaria in the city, which lies in what is now Iraq, on 10 June 323 BC.
In the ensuing years, the price of agricultural commodities rose sharply, while two of his generals - Seleucus and Antigonus the One-Eyed - fought to fill the power gap. Alexander's only heirs were an unborn son and an insane half-brother.
Temin suggests that the generals used Alexander's treasure to fund armies, releasing silver and causing inflation. The destruction of crops and the need to feed troops would also have driven prices up, notes archaeologist Robert van der Spek of the Free University of Amsterdam.
By the quivers of Babylon
The analysis shows that the doings of the great and good - which tend to be what history records - were not divorced from the general life of the masses, says Temin: "There were sharp repercussions for ordinary people."
The ancient markets remained volatile for about 20 years, until Seleucus was firmly established in charge. Prices then remained stable until around 141 BC, when the Parthians attacked from Persia, initiating a prolonged period of conflict and steadily rising prices. Babylon, once the biggest city in the world, declined over the next few centuries, eventually collapsing into abandonment and ruin.
Temin found that current prices were no guide to the future - they followed what is known as a random walk. This is a feature of contemporary stock markets, and is "very powerful evidence", of markets at work, Temin says.
The data do not mean that a modern capitalist would recognize Babylon as a market economy, comments van der Spek. "Many people received daily rations from the temple or palace, and didn't go to the market to buy their food," he says.
References
* Temin, P. Price behavior in ancient Babylon.
Explorations in Economic History, 39, 46 - 60, (2002).
© Nature News Service / Macmillan Magazines Ltd 2002
By that standard, we aren't a market economy either. Hmmm... he may be on to something.
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Note: this topic is from January 7, 2002. Thanks Oxylus. |
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