Tuesday, June 16, 2009

Rise and Decline of Hellenistic Monarchies

Recently, Newsweak featured a headline claiming that "We Are All Socialists Now." Perhaps it should have featured a picture of Demetrius Poliorcetes on the cover instead. The history of the ancient Hellenistic cities in what is now Arabia and Turkey might provide more useful knowledge about what is happening in the United States now than one can find in newspapers, magazines or on television.

Michael Rostovtzeff was a Ukrainian-born archaeologist and professor of ancient history at Yale beginning in 1925. He died in 1952. He was among the first historians to study the ancient world's economies and to emphasize the role of capitalism in the rise and decline of ancient societies.

I have just started reading Rostovtzeff's monumental Social and Economic History of the Roman Empire*, one of a number of massive books that he authored. The text runs to 488 pages but there are in addition more than 200 pages of footnotes. Friends of liberty will do well to consider Rostovtzeff's work.

He starts the book by discussing the history of Greece and the Hellenistic city states that Greeks founded in what is now Arabia and Turkey. He notes that "class warfare" was common in the Greek city states and in Greece proper. "This class-war made the growth and development of a sound capitalistic system very difficult." There were widespread movements for redistribution of land and abolition of debts. The problem was so widespread that Athens and Itana in Crete required citizens to swear that they would not put redistribution of land and abolition of debts to the vote.

Rosttovtzeff writes:

"Revolution and reaction followed each other with brief delays, and were marked by wholesale slaughter or expulsion of the best citizens...What was lost by the Greek cities of the European mainland and most of the islands was gained by the Hellenistic monarchies and more especially by the Greek cities of the East."

The eastern Hellenistic kings of the fourth and third centuries BC were anti-libertarian capitalists, much like more recent rulers of Chile and post-Mao China. "The result was that every attempt at a social revolution within their gates was stopped by the strong hand of the Hellenistic monarchs, and that the cities were very rarely involved in external warfare."

The kings' suppression of revolution had a libertarian effect, at least temporarily. "The accumulation of capital and the introduction of improved methods in trade and industry proceeded more freely and successfully in the East than in the cities of Greece proper. Hence the commercial capitalism of the Greek cities of the fourth century attained an ever higher development, which brought the Hellenistic states very near to the stage of industrial capitalism that characterizes the economic history of Europe in the nineteenth and twentieth centuries."

That is mind blowing. In the fourth and third centuries BC Greeks in Asia Minor were attaining 19th century levels of industrialization? In other words, from the year 300BC until 1900 virtually no consistent economic progress was made? And how easy might it be to revert to the decline that followed the fall of the Roman Empire roughly 1500 years ago? True, these societies depended on slave labour. But recall that the American economy also so depended until 1862.

Rostovtzeff notes that the Greek cities not only had a large internal market and a large, competitive trade, but also:

"They gradually improved the technique of agricultural and of industrial production with the aid of pure and applied science...and they employed both in agriculture (including cattle-breeding) and in industry the methods of pure capitalistic economy based on slave-labour. They introduced for the first time a mass production of goods for an indefinite market. They developed banking and credit and succeeded in creating not only general rules for maritime commerce...but also a kind of common civil law, which was valid all over the Hellenistic world. The same tendency towards unification may be noticed in attempts to stabilize the currency, or at least to establish stable relations between the coins of the various independent trading states."

These impressive advances, a globalization that occurred nearly 2,500 years ago, very quickly "stunted" and then was "atrophied" by "constant warfare which raged almost without interruption all over the Hellenistic world." "The wars forced the Hellenistic states, both great and small, to concentrate their efforts on military preparations, on building up the largest possible armies and navies, on inventing new devices in military engineering, and thus wasting enormous sums of money as, for instance, in the case of the siege of Rhodes by Demetrius Poliorcetes."

Rostovtzeff notes that this led to:

"Nationalization of both production and exchange, which was carried out in some, at least, of the Hellenistic monarchies, especially Egypt. By nationalization I mean the concentration of the management of the most essential branches of economic activity in the hands of the state, that is to say, of the king and his officials. Profitable at first for the state, this system gradually led to dishonesty and lawlessness on the part of the officials and to the almost complete elimination of competition and of the free play of the individual energy on the part of the population.

"Hand in hand with this tendency towards state control went the minute elaboration of a highly refined system of taxation, which affected every side of economic life. It was based on the experience of the Oriental monarchies, but it went much farther both in inventing new taxable objects and in improving the mode of collecting the taxes. The burden of taxation lay heavily on the population of the Hellenistic world...

"This disastrous economic system of the Hellenistic monarchies produced ever-growing discontent among the masses of the natives. From the end of the third century onwards the native population of Egypt, for example, rose repeatedly against its foreign oppressors..."

Naturally, the warfare and economic dislocations due to taxes and socialism in the Greek world opened the city gates to a rising new imperial power: Rome. Might the United States' ever-expanding government spending; subsidization of corrupt and inefficient financial institutions and corporations; and its military-industrial complex open the door to the ascendancy of a new power, this time from the East?

*All quotes in this blog are taken from chapter 1, "Italy and the Civil War".

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