Saturday, February 28, 2009

Capitalism in the Roman Republic

Let’s start with a definition:

Capitalism is an economic system in which wealth, and the means of producing wealth, are privately owned and controlled rather than commonly, publicly, or state-owned and controlled. Through capitalism, the land, labor, and capital are owned, operated, and traded by private individuals or corporations and investments, distribution, income, production, pricing and supply of goods, commodities and services are determined by voluntary private decision in a market economy.

According to Dictionary.com the word capitalism came into existance around 1850, but two thousand years before then the Roman Republic was a capitalist economy without a definition.

It’s my theory that a division of labor always exists in human society. The more people the more differentation until people run out of new skills to try or limits are placed on the number of skills (e.g. poverty). Capitalists always show up in societies as salemen or entrepreneurs who are clever at buying and selling, so as Rome became a great city its merchantile capabilities multiplied.

Roman businessmen were born out of a middle class that didn’t exist at the beginning of the Republic. In the days of the kings the ranks of the army were divided by wealth. Those at the top rank could serve in the cavalry, hence the name Knights or Equestrians. Later the Knights quit the cavalry but retained their status as the leading voting block in the Comitia Centuriata.- the senior people’s assembly.

As Rome grew the demand for business grew, but the nobility considered merchant activities off limits for them – it lacked dignitas. Since there was no government administration the Senate looked to the Knights to handle the business of the Republic. The first of these “businessmen” were called Publicans. They were employed by the state to manage public contracts: to collect taxes, manage mining companies, and oversee road construction. These contracts were awarded at auction and their duration was five years.

During the Punic Wars Publicans built ships for the Roman Navy and equiped the Roman Army. The nobility began to covert the profits of the Knights and become involved in sea trade, until a law was passed in 218 BC forbidding Senators from owning ships with a larger capacity of more than 300 amphorae (1 amp= 6 gal). In 215 three Publican contractors were censured because they provided financing to Spanish tribes (the enemy). They scuttled their ships and sued the Republic for reimbursement for the loss.

The Senate chose to utilize the Knights commercially, instead of creating a civil service, and disregarded their political claims. But the power of the Knights grew and they were able to exert great influence as a class. In 169 BC the censor Tiberius Gracchus cancelled all Publican contracts because of corruption, but the Knights rebelled and accused him of treason against the state. Tiberius was acquited, but the Knights has flexed their muscles.

By the fall of the Republic there were hundreds of corporations selling shares to investors. Manufacturing and trades flourished: including furniture making, leatherwork, weaving, metalworking, stoneworking, and food processing.

6 comments:

Richard said...

Mike,

Read your blog and I agree. Here is a rough draft of my new blog and your comments are welcome.

rycK

History of Capitalism:

Since ancient times capitalism has been the major driver for economic and social advances in most societies. It is only when such a natural process is rejected that societies and cultures regress to poverty, barbarism and disintegrate. The many attempts to truncate the beginning of the history of capitalism argue that capitalism as we know it started around the 17th century with the Netherlands. Some admit it was in the Middle Ages. The definition of capitalism requires that means of production [capital] be in private hands and be invested in the form of a risk and that labor and industrial inputs be defined by market forces and these limitations ignore the salient fact that the Romans perfected this system or something very similar to this before 500 B.C.E. Since they copied what they liked as in arches, food, war at sea, Greek literature, poetry, philosophy, mythology and statuary, it is probable that their adaptation and improvements of capitalism were a modified version of what Egypt, Greece or other places [like the aftermath of whatever the Sumerians used] left behind as these earlier societies may have shaped the significant founding branches of capitalism. I agree with Mike Anderson on this fundamental point that the Romans were practicing capitalism in ancient times. I think that capitalism is a natural human collective force and seems to work well in most places for most people until it becomes excessive. The far left believes that capitalism is evil and anti-human. History vindicates my position and not theirs. Capitalism is not faultless but socialism is worse and communism is unacceptable. Fascism is a middle case in many respects but the left is apparently willing to embrace at least parts of this system in the near future with their Apollo Alliance. The outcome may be influenced by a lack of militarism unless it sparks a civil war. Fascism was apparently born from the threat of Bolshevism ; the Apollo Alliance may be born from the threat of capitalism.

Bettie said...

I would argue that the decline of the Roman Empire was caused by a combination by a venal imperial system, collapse of centralized military authority, invading barbarians from the North, and the steady erosion of literacy under Christian state religion, but hey, what do I know, guess it coulda been the “banker jews” after all.


victims

Anonymous said...

I maintain that capitalism is the natural state for a society, however primitive, to produce goods and services." Such a society is based on inequality and the selection of persons for specific tasks.

The Pyramidal Theory of Capitalism Explained in Simple Terms.http://rycksrationalizations.blogtownhall.com/2010/01/07/the_pyramidal_theory_of_capitalism_explained_in_simple_terms.thtml

"There is no equality in this world although such a nostrum is the enduring foundation for grand speeches and maudlin politics and majestic welfare systems that purport to change the world in such a manner as to achieve this unattainable attribute for all of us. If we inspect a randomly assembled group of humans in a cluster no larger than 10 it is difficult to show that all members are equal in any respect. It is even more difficult to find two specimens in this cohort that are ‘equal’ in more than a few basic attributes. The physical differences and age range of the members are enough to demonstrate that equality in any form cannot exist for long. If the cohort was expanded to 10,000 and sorted to form smaller groups of the same age, weight, cognitive skills or any of a host of attributes these smaller groups would, again, show that although many are similar there is no broad equality in this biased selection. People have different gifts, learned skills and desires. Capitalism naturally accommodates most of these differences into different strata and directs people to perform diverse essential tasks according to their attributes to the mutual advantage of the group. Socialism strives to have only two groups: the masses and the elites. Strangely, success in economic terms is not that important in Marxist and socialist governments.

Since there is no equality that can be demonstrated in even small groups we then come to the abrupt and perplexing question: who, then, can work the levers of capitalism [or any other system such as socialism or Marxism or a feudal system] and provide the leadership and successful structure for the group? The answer to this question is really not very amenable to description or even analysis and cannot be answered in detail because of the variations in human society itself. Much of this is trial and error especially in capitalism. Pyramids are trial balloons and rise and fall when current results are compared to the mandatory business plans. Those who can make this natural process function successfully stay in leadership positions in capitalism and conversely in socialism where failure is tolerated at the top."

rycK

JM said...

what about capitalism in ancient Egypt and Mesopotamia, not to mention old Chinese and Indian civilizations

Anonymous said...

I don't think there was capitalism in China etc., the state had a hand in everything in those societies.

I imagine them more as a sort of feudalism but please correct me if I am talking rubbish.

Jim Nasium said...

Here in an interesting essay in the origins of Capitalism which mentions India, the Middle East and China.

http://pubs.socialistreviewindex.org.uk/isj102/harman.htm

BTW I am not a socialist