The Hellenistic kingdoms and republican Rome hardly pursued any economic policy. An exception was Ptolemaic Egypt, where the government tried to manage the country as one large estate, or, perhaps, oligarchic Carthage, which strove by force to turn the trade in vast tracts of the western Mediterranean into a monopoly for its own merchants. But, in general, governments hardly if ever took measures aimed directly at some economic purpose—apart, of course, from levying tributes or taxes. What Rome did in 167 BC—deliberately hurting the commerce of Rhodes and favoring Delos by making the latter an international port of free trade—was, as far as we know, unique. The main reason for this was no doubt the lack of sufficient knowledge of the laws of economics. Yet, government actions, both in times of war and of peace, often did have great economic effects. For instance, the payment of soldiers in the Hellenistic kingdoms and in Rome, constituted a regular monetary “injection” into the economy. Coins frequently were minted by the states solely for the purpose of paying the troops and in that way coins were brought into circulation; an increase in all sorts of small-scale commercial activities as well as inflation was often the result. Warfare always meant devastation and plundering. It was in the form of war booty—especially gold and silver, works of art and other valuables, and slaves—that a large part of the wealth of Greek cities and Hellenistic kingdoms was transferred to Rome and Italy. Presumably, war was the most important factor in transferring wealth from one region to another. To a much lesser degree, war was a creator of wealth, for instance, by state contracts for the manufacture of weapons, tents, and so on, or the commissioning of warships—presumably, much of the industry here, such as smithies, was set up by the state and connected with state arsenals.
The equivalent of plunder was in times of peace the levying of tribute or taxes. All the Hellenistic kingdoms and Rome practiced direct taxation on property, either in the form of a fixed amount related to the size of the property or of a certain percentage of the income thereof. Here too, Roman expansion brought about a redirection of capital flow toward Italy, as when after the annexation of regions outside Italy as provinces, the direct taxation that their inhabitants used to pay to their own rulers—10% of the yield in Sicily, which became the norm in many other provinces—now went to Rome. The regular income from the provinces grew so large that since 167 BC, when an exceptionally large but one-time amount of booty was obtained from Macedon, the levying of taxes on Roman citizens in Italy was discontinued. Moreover, several states had owned properties, foremost mines, which,
Leased out to tenants or directly exploited by state-owned slaves, provided considerable income. As the conqueror, Rome took over these from the defeated cities or kings. Finally, everywhere in the Mediterranean world indirect taxes yielded another source of income for the state. They appeared in various forms. Omnipresent were tolls and custom duties at harbors and frontiers. A common tariff was 2% of the value of all imported and exported goods. That Rhodes until 167 BC managed to cash in 50,000,000 drachmas annually in this manner tells us something about the volume of trade there was in that period. The income from tolls and custom duties in Alexandria and the Red Sea ports of Egypt together certainly cannot have not been less than that sum. Other indirect taxes were special duties on particular transactions, in Rome, for instance, a 1% levy on the value of manumitted slaves.
All that income was also spent by the states, in the first place on near-endless wars. Armies and navies always swallowed up a large part of the state budgets, in time of peace alone already 50% or more. In time of war, income had, if possible, to be supplemented by plunder, and in the case of Roman wars very often also by “war indemnities” imposed on the defeated parties as soon as peace was concluded. Because the costs of warfare in these centuries hardly constituted economically sound investments that could create new wealth, they ultimately hindered economic growth. In contrast, the final annexation of all lands around the Mediterranean into the one empire of Rome would initiate a period of general peace and hence of growing prosperity, especially in the Greek-speaking east. Further state expenditure was on building projects, both harbors and roads for military and commercial purposes and luxury buildings in the big cities. Initially, only Hellenistic centers such as Alexandria, Antioch, Pergamon, and Rhodes could boast large and imposing works of architecture, but in the 2nd century BC Rome too, relatively late, started a series of public works, such as multipurpose public halls or basilicas, aqueducts, stoas, and temples, although a renovation and re-urbanization on a grand scale in Rome would only begin under Caesar, Augustus and the emperors succeeding him. Other state expenses were purely consumptive, for instance, the distribution of grain in Rome to the poorer citizens. Only in states with some level of bureaucracy, such as Egypt, the apparatus of government itself was a serious expense item, hardly if at all in states with a city-state government structure, such as the Greekpoleis or Rome.
We may conclude that state actions in the Hellenistic period deeply affected the economy but seldom as a result of a conscious policy. Economic thinking did not rise above a simple level. Wealth was considered as something static, something people possessed or not, to be acquired only by taking it away from the possessor, so that the enrichment of one party implied the impoverishment of another. Economic reality, with its small elite of the very rich, seemed to confirm this thinking, as did political reality with the rise of Rome and the consequent enormous transfer of riches to Italy.
World History
