The Glorious Free Market

Michael Kulikowski

  • Poiesis: Manufacturing in Classical Athens by Peter Acton
    Oxford, 384 pp, £51.00, December 2014, ISBN 978 0 19 933593 0

‘Unless we can recognise the affinities as well as the differences in our studies of other societies, it is hard to explain why anyone should pay or be paid for studying them.’ You have to admire an academic monograph that wears its neoliberalism so proudly as to approve the abolition of academic study lacking in immediate ‘relevance’. Peter Acton throws out a red herring on page one – ‘agriculture was the real capitalism, contributing to social inequality’ – but agriculture and class analysis are both wilfully absent here. Poiesis is a book about making things and selling them. Acton’s is a world in which production, commerce and retail were king; everyone participated in a market economy governed by rational invisible laws, with unprecedented material prosperity the result. Athens, thanks to trade, ‘was a place of opportunity’. It welcomed skilled immigrants and fostered expatriate communities because both enhance capital growth. With craftsmen no longer constrained to sell to end-users, retail was born, as a ‘separate business and major employer’. Manufacturing was a slave’s best chance of gaining freedom and social enhancement, never mind that most were rented out in gangs or that they were valued in sensitive economic sectors because they could be ‘kept honest through torture’. Best of all, minting aside, Athenian government left capital alone to work its magic: financial innovation managed debt, invented securitisation and risk management and fostered ‘public private partnerships’ (what other historians call tax-farming). Acton’s 13 years as a vice president of the Boston Consulting Group are rarely not on display.[*]

Despite the ongoing parlous state of Western economies, Poiesis is not the only new book to extol the glories of the ancient free market, but its voguishness does not diminish its historical acuity.[†] Acton takes on the whole of the manufacturing landscape of the classical Athenian polis with remarkable success. As a synthesis of the evidence for industrial and craft manufacture – hugely variable in quantity and quality – it is difficult to find fault with his book, and some hard-won insights result from his comprehensive approach. Perhaps the most basic is the extent to which working with their hands was part of everyday life for most Athenians, most of the time. The women of every household, even the wealthy, spun wool, wove fabric and made clothing all year round. Much simple woodworking was also done at home, though certain types of furniture manufacture were probably done by workshops of specialised craftsmen.

Most interesting are Acton’s calculations of scale in the pottery and textile industries. The efficiency of a pottery depends first on how many pots can be fired in a day, and second on how much labour is necessary to keep the kilns firing at maximum capacity. There is no standard answer to the question, but the physical remains of Athenian kilns suggest that they were generally quite small, three feet in diameter and perhaps half that in height. Acton approaches the problem using the mathematical procedure of ‘circle-packing’, which calculates the number of non-overlapping items of different sizes that can be fitted into a given circle with the minimum wasted space. Although hypothetical, Acton’s calculation is based on the dimensions of pottery items in the museum of the University of Melbourne. His model gives theoretical maximums from 15 short squat pots to several hundred long thin vases, with between a third and a half of the space in the kiln being wasted. Because preparing clay and throwing pots take roughly the same amount of time, each potter would need two (slave) assistants – one to prepare the clay, one to turn the wheel – which means that an efficient workshop would need three times as many potters as could fill the kiln plus two additional kiln operators. Since even a not very skilled potter can throw simple items in one or two minutes each, Acton calculates that a single potter and his assistants could fill a kiln a day and that because of the time it took to heat up and cool down, only one firing per day was normally possible. He argues convincingly that a citizen-potter could, with only a couple of slaves, produce enough to earn an income and attend to his civic duties, but not make any great profit; and also that the profits from coarse and household pottery were so modest that there was no case to be made for production on an industrial scale. Fine wares were profitable because famous artists could command a high price; their productions were necessarily small scale. All told, most Athenian pottery was produced by casual family businesses, usually on a seasonal basis, as a way of supplementing other income. It’s a world away from the mould-formed, industrial production of Hellenistic and Roman times, when technology allowed the construction of much larger and more capacious kilns.

Another revealing case study focuses on TCF, the management consultant’s term for textiles, clothing and footwear. Ancient textile work is usually thought of as domestic manufacture almost entirely in the hands of women (it was repetitive, interruptible and didn’t conflict with child-rearing). Acton gathers the considerable evidence for male weavers, on the one hand, and large-scale manufacturing, on the other. Such specialist work as hangings, rugs or bedding would have taxed the resources of a household. Larger sites could indicate something altogether different: the presence of a brothel, whose slave inmates could produce a saleable surplus when not seeing to their other duties. He turns up sound ancient evidence in support of the theory. As for the scouring, fulling and dyeing of wool, this messy process – it involved trampling barefoot in pools of stale human urine – is precisely the sort of thing one would expect to be confined to places where it wouldn’t upset the neighbours.

There are other good analyses along these lines, from a chapter consolidating the evidence for stoneworking and construction industries, and considering the time required to create monumental statuary, to a convincing demolition of Victor Davis Hanson’s wildly inflated estimate, in A War like No Other, of the numbers employed in the shipbuilding industry. Even if the Athenian navy required two hundred new triremes a year (which was unlikely most of the time), only two thousand or so shipwrights, and perhaps double that number of component-workers, would be required, rather than the twenty thousand Hanson suggested.

Indeed, on this showing, the Greek miracle was built on a remarkably unelaborate economic basis. For Acton, that’s what made possible the lifestyle of Athenian citizens, who could earn an income while also taking part in political life. That raises something very peculiar about this book, and a contradiction at its centre. In case study after case study, Acton describes an Athens very unlike our post-industrial world, and still less like that of the 19th and 20th centuries. Yet all his case studies are couched in the language of classical microeconomic theory and a postwar competitive business and management theory that he spells out in great detail and with faith in its revealed truths. Theory can be good for historians, and few of us practise the perfectly self-abnegating primary research prescribed by Geoffrey Elton. We need something larger to help us move from the specific to the general, and towards some approximation of meaning. Acton presents his task reasonably, challenging readers to use classical microeconomics to ask whether Athenians ‘might still have operated in practice according to the same set of fundamental economic principles that we are familiar with today’, even though they lacked the language or conceptual framework within which we articulate those principles. For Acton, there’s never any question that ‘the same economic laws prevailed despite the different context’ because the microeconomic ‘framework is timeless’ and because ‘irrespective of conscious motivation by ancient agents, elementary economic principles are heuristically effective and a source of important historical insight.’

But Acton hedges off entire sections of the law of competitive advantage that do not apply: first, because technology is so limited, capital costs are low enough not to be effective barriers to entry; second, economies of scale are extremely rare, because the costs of materials and slaves are the same for all, and the cost of feeding and maintaining slaves is the same for all (which is not self-evidently true, but never mind); third, there are no fixed assets, only slaves and inventory, so no asset turnovers are possible. This means that the only source of competitive advantage in ancient manufacturing is product differentiation. The timeless laws are there, in other words, and they would operate if the conditions were right, but they weren’t, so they didn’t. Among the excellent empirical case studies, the theory reveals only that it’s easier to gain a reputation for excellence in a difficult, hard-to-learn skill like armour-making or vase-painting than in making simple pots, and that some businesses are easier to conduct on a large scale than others. Everything else is good old-fashioned inference and hypothesis on the basis of primary evidence, while a final chapter on Demosthenes’ asset portfolio ties itself in knots trying to explain why what looks like an irrational failure to maximise returns really is rational – a problem that exists only because the ancient evidence seems to contradict the model. In other words, Acton’s competitive advantage theory may have been useful for him to think with, but the Athens he describes in the specialised language his model requires could have been described and understood just as well without it.

Laborious, and more than a little otiose, the assumed timelessness of the model has another, more serious failing: Acton’s Athens, for all its specificity, exists on a strangely abstracted plane, out of time and out of space. There is no problem with treating the classical Athenian economy synchronically, using evidence where it exists, regardless of when in the course of roughly three hundred years it was generated: the institutional and economic history of antiquity is very hard to write diachronically, because the evidence is so sparse and unevenly distributed in time. But because the pace of change was slower than in political or intellectual history, data can with due caution be used across the period being discussed. Without that caution, it’s hard to correct selection bias towards a theory, or to care about getting details right. It allows for non-trivial errors, such as placing Hipponicus in the late fourth century and Callaeschrus in the mid third, a hundred years out in each case, or attributing to Strabo inferences that modern scholars have drawn from a portion of his text other than the one Acton cites. Maddeningly, it allows a book that talks about a great deal of site-specific economic activity to be published without a map of Attica, let alone a plan of the city, because it’s the timelessness of the economics, not the actual Athenians that matter. It’s hard to feel any affinity with these economist’s ciphers, which is rather sad given Acton’s stated criteria of historical relevance.

It’s worth remembering an ancient economic reality that should be uncomfortable for acolytes of neoliberalism: classical Athens, Acton’s paradise of a rational market (and a relative paradise even for slaves), was a much poorer place than the Roman imperial city a couple of hundred years later, and the Roman world was almost inconceivably richer than western Eurasia would be again before the late Middle Ages. This wealth was not the creation of a benevolent market playing by its rational and invisible rules. It was the consequence of massive state investment, at first in conquest, but then in infrastructure, subsidised food supply and transport, as a way of converting, through taxation, the fruits of the land into salary for the army. Trade and manufacture piggybacked on imperial infrastructure, or on local infrastructures made necessary by imperial requirements, and no rentier class could capture the machinery of state until that machinery had been irretrievably weakened in the civil wars of the fourth and the fifth centuries ad. Now, as a globalised plutocracy regards government chiefly as a source of rents and a screen behind which to hide from the vast majority of Americans and Europeans who are growing poorer in real terms, Acton’s faith in an untrammelled and all powerful market ought to be impossible to sustain. But let him have the last word: ‘Democracy on Athenian lines simply could not exist in a developed economy today.’

[*] A management consultancy with annual revenue in 2014 of $4.55 billion and clients including Google, Ford and the Russian energy ministry.

[†] See especially Josiah Ober, The Rise and Fall of Classical Greece (Princeton, 464 pp., £24.95, May 2015, 978 0 691 14091 9).