Introduction

Investment in capital, both physical and financial, and innovation in its uses are often considered the linchpin of modern economic growth, while credit and credit markets now seem to determine the wealth—as well as the fate—of nations. Yet was it always thus? The Roman economy was large, complex, and sophisticated, but in terms of its structural properties, did it look anything like the economies we know today? Through consideration of the allocation and uses of capital and credit and the role of innovation in the Roman world, this volume explores how capital in its various forms was generated, allocated, and employed in the Roman economy; whether the Romans had markets for capital goods and credit; and whether investment in capital led to innovation and productivity growth.

The Archaeological Perception of Capital and its Transformations in Urban Occupations

This chapter explores the notions of capital, innovation, and investment in urban occupations during the Roman period, viewed through archaeological data. With regard to these three factors, it focuses not upon macroscopic changes in the entire technological system but on ‘microscopic’ variations in urban occupations, based on a thorough analysis of the chaînes opératoires involved in the various urban crafts and trades. Leaving aside the difficulty of any attempt to draw a realistic synthesis, it shows that the quantitative and qualitative diversity of shops and workshops should be understood as a performant indicator of the urban economy: when added together, the different forms of real capitalization would appear to be a generative force.

Roman Water-Power

This chapter summarizes the archaeological evidence currently known for Roman water-mills, tracing the development and spread of water-powered grain milling over time across the Roman Empire. Problems of quantification and evidence bias, both documentary and archaeological, are addressed. In particular, it is argued that large discoidal millstones, formerly thought to derive either from animal-powered or water-powered mills, must come from water-mills, and that the idea of Roman animal-driven mills with discoidal millstones is a myth. This dramatically increases the amount of evidence available for water-powered grain milling, although very unevenly spread across the empire, and heavily dependent on the intensity of research in particular regions—good for Britain, parts of France, and Switzerland; poor everywhere else. The chapter also summarizes the state of knowledge on other applications of water-power—for ore-crushing machines at hard-rock gold and silver mines (by the first century AD), trip-hammers, tanning and fulling mills, and marble sawing (by the third century AD). The picture is fast-changing and the body of evidence continues to grow with new archaeological discoveries. The chapter ends with some thoughts about the place of water-power in the overall economy of the Roman world, and on the transmission of water-powered technologies between the Roman and medieval periods.

Temples and Traders in Palmyra

As is generally known, during the first three centuries of the Common Era, the Syrian city of Palmyra played a fundamental role in the trade between Asia and the Mediterranean area, to the point that it became the most important trade centre along the western section of the Silk Road. The different roles of merchants and businessmen involved in the Palmyrene caravan trade has been the subject of studies over a long period. What is still an elusive element is the role of capital in the Palmyrene trading system, that is to say the money used to organize the merchant expeditions and to buy the goods coming from the East. Besides, the very nature of the caravan trade implied long and dangerous journeys, which rendered the investment rather risky. On the other hand, a large profit was gained once the goods had reached Roman territory. In order to identify the possible sources of capital in Palmyrene society, that is to say the groups and the institutions able to provide the initial money necessary for the trade activity, this paper investigates the relations between merchant classes and sanctuaries. The many dedications made by traders and private citizens to the city sanctuaries, and the frequent presence of religious figures among the trading families’ members, seem to suggest that the numerous temples of Palmyra played a role in the commercial trade as holders of capital, which could be lent and employed in the activity of trade.

Credit and Financial Capital in Roman Egypt

Roman Egypt sets an example of a monetized society in which credit was widely used in both monetary and in-kind transactions. During the first two and a half centuries of Roman rule, interactions between the three main legal systems in Egypt—Demotic, Greek, and Roman—gradually created a coherent institutional environment that structured credit and financial capital. In this environment, Greek law gained the upper hand as the most frequently used system of law for conducting economic interactions. The administrative, fiscal, and financial conditions set up by Roman governance, and above all the new and reduced maximum Roman legal interest rate, affected the development of credit-related mechanisms. Legal structures that enabled the creation of credit went through a slow and gradual change, in which available legal formats were adjusted to accommodate for somewhat different activities. Παραθήκη‎ formulae, originally used for making deposits, increasingly were being used in de facto loans, thereby casting new content in an existing formula. While this practice is commonly attested in transactions between private individuals, using παραθήκη‎ agreements seems not to have served as a common financial tool for Roman Egypt’s banking sector.

Capital and Investment in the Campanian Tablets

This chapter is devoted to capital and investments in the three groups of tablets found in the Vesuvian cities: the tablets of L. Caecilius Iucundus in Pompeii; those of Herculaneum; and the tablets of the Sulpicii (also known as the Murecine tablets) which have to do with transactions carried out in Puteoli. These contain almost no evidence of innovation; on the contrary, they bear witness to a wide range of economic activities and give much information on capital and investments. Among these investments, it is necessary to distinguish two categories: firstly, investments that involve lending money and charging interest, without the lender being directly involved in a given production process or business (this type of investment is discussed in the second part of the chapter); and secondly, investments that are to the contrary accompanied by direct involvement of the lender in production or in commercial activity (investments discussed in the third part of the chapter). The first part of the chapter studies the ways in which a group of freedmen might manage to amass a certain capital and to have investments. The final part is devoted to the dealings which Caecilius Iucundus had with the city of Pompeii.

Capital Markets and Financial Entrepreneurs in the Roman World

Modern capitalism requires institutions that provide financial capital to entrepreneurs. The need for financial capital has been inherent in capitalism since the middle ages and was equally strong for ancient commercial enterprises. The financial institutions and instruments developed in early modern Europe, however, did not exist in the Roman world. This chapter argues that we need to analyse Roman financial institutions for what they were and relate them to the levels of commerce and production they made possible. The focus is on commercial intermediaries (deposit bankers and others) who offered financial services bridging the gap between those who had money and those who needed it. Roman credit markets relied on open-access institutions. In the heartlands and hubs of the empire credit markets were thick and capital flowed easily from investors, through intermediaries, to entrepreneurs and back. But this was not true everywhere, and throughout its history, even in the areas where credit markets were thick, social networks were essential for financial transfers to be possible. Anonymous transactions through an impersonal financial market remained a marginal phenomenon because the negotiability of financial instruments did not support the development of such a market. In the absence of a central banking system with a structural lender of last resort and an interlocking network of banks, the money supply remained largely limited to the stock of metal currency. The Roman financial system was sophisticated and efficiently fulfilled the needs of estate owners, farmers, craftsmen, shippers, merchants, and retailers, but never realized a financial revolution comparable to that which gave birth to the modern banking system.

Labouring for God

The Christianization of late Roman society had a profound impact on the Roman economy. Alongside the surfeit of funds and properties, which passed into ecclesiastical coffers, the proliferation of churches brought hundreds of thousands of Romans into the employ of the Christian clergy. The past forty years of prosopographical research has revealed that the bulk of the late ancient clergy had much more modest social origins than traditional scholarship presumed. The majority were sub-elite Romans far below the true senatorial aristocracy; many also laboured in secular occupations in order to supplement their clerical stipends. As this chapter explains, socio-legal proscriptions against the ordination of noble, servile, and occupation-bound populations as well as demographic constraints largely limited the recruitment of the clergy to ‘middling’ tradesmen and urban professionals such as doctors, lawyers, and educators. More importantly, such occupation-holders usually exceeded the basic literacy mandatory for biblical study and liturgical performance. This chapter attempts to quantify the difficulties which bishops encountered in stocking their clergies. It argues that bishops deliberately targeted free plebeians and curiales who had already escaped their onerous civic burdens through exemptions granted to certain profession-holders such as educators, physicians, and architects. In identifying these ‘free agents’, churches gained access to a sizeable portion of the empire’s available human capital, especially in regard to administrative, legal, and medical training. The admission of such men promoted the appropriation of their prior occupational practices within the Church, which drove institutional innovations from nascent ecclesiastical bureaucracies to ecclesiastical hospitals.

Invention, Tinkering, or Transfer?

The production of wine and olive oil was a major activity within the Roman economy, and therefore innovations to the press mechanisms used are of great importance. Historical discussions have focused on the introduction of a screw, and have assumed that presses throughout the Roman Empire were transformed, with the aim of increasing efficiency, by this single ‘invention’ in the first century BC to first century AD. However, recent archaeological evidence reveals a wider range of innovations, not always involving the use of a screw, and over a much broader period, and shows that press types evolved within regional patterns, rather than uniformly. These innovations can only be understood by considering who initiated and spread them, how, and why. Factors such as the physical weight and durability of press parts, access to skills for ongoing maintenance and repairs, the absence of printed treatises and drawn diagrams, the military and communications networks of the empire, and the social context of ownership and local settlement structures all influenced innovation and its diffusion. A drive to increase production cannot fully explain the patterns of change, and some innovations served other purposes, improving safety or ease of use. Innovations seem to have been developed not by an educated ‘inventor’, but at least partly through day-to-day ‘tinkering’ by local artisans and farmers.

Capital Goods in the Roman Economy

Research on the Roman economy and the possibility of Roman economic growth has focused on demographic structures, on market integration, on credit facilities, on technology and modes of organization, and on institutions and mentalities. A factor that has received less attention is investment in capital goods. Economists have found, however, that among all the different variables that might play a role in economic performance, investment in production equipment (tools, machinery) stimulates economic growth particularly strongly. This chapter focuses on three case studies: (1) agricultural tools, equipment, and workspaces; (2) capital goods used in riverine and maritime transport, i.e. ships and the tools and workspaces needed for shipbuilding; and (3) workspaces and tools employed in urban production and service provision. It asks who invested in these capital goods, who owned them, who produced them, and how production was organized. Most importantly, it investigates how capital goods were allocated among those who needed them, i.e. the people producing and transporting goods and services for consumption. It is concluded that, given the levels of wealth necessary to invest in the production of the types of capital goods discussed here, ownership of such capital goods would overwhelmingly have been concentrated in the hands of social and political elites, and it is argued that the social and legal ties that connected ordinary producers and distributors of consumption goods and services to these elites played a crucial role in determining the level of access they had to these capital goods.