Alexandria’s development into one of the largest cities in the Mediterranean world had major consequences for the economy. The population of Alexandria was in the order of at least several hundred thousand. In the first century bc, it was possibly as high as 500,000, and under the empire perhaps 750,000 (Rathbone 1990: 120; Manning 2003c: 47-8). Alexandria was thus the second largest city in the Mediterranean world (Rome had a population generally estimated at about one million). It represented the major trading link between the eastern and western Mediterranean (Rathbone 2007: 710-11). Much of the grain used to support the supplies of Rome and Constantinople was exported from there, and state-subsidized trade in grain also spurred additional commerce (Morley 2007). Alexandria was linked to the rest of Egypt by the Nile, which provided a transportation network that made it possible to ship agricultural products there relatively cheaply from most of the country (Rathbone 2007: 711). The Ptolemies founded other cities as well, most notably Ptolemais, which became an important administrative center for Upper Egypt in the Thebaid; under the Ptolemies it may have had a population on the order of 50,000 (Manning 2007: 442). Other important administrative cities, including Memphis, and possibly also Thebes, had populations on this order of magnitude (Manning 2007: 442). Roman rule would foster further urbanization in Egypt, as it did elsewhere in the empire. Many nome metropoleis, the capitals of Egypt’s forty or so administrative divisions, developed into autonomous cities similar to those elsewhere in the Roman Empire. Essential to this transformation was the Roman policy to foster local governmental institutions comparable to those in other areas of the empire (Bowman and Rathbone 1992). This process reached its logical conclusion under the emperor Septimius Severus, who, early in the third century ad, reversed a long-term Roman policy of denying Egyptian cities city councils. Septimius Severus thereby established nome capitals as self-governing municipalities responsible for the administration and taxation of the surrounding region. This political transformation was linked with an economic one, since Egyptian cities were starting to have a sufficiently large land-owning class capable of shouldering the financial burdens associated with local-office holding. Many of these cities had long had features characteristic of cities elsewhere in the Roman Empire, such as gymnasia, bath complexes, and other forms of monumental building. Oxyrhynchos, for example, had a large and lavishly decorated theatre (Rathbone 2007: 706-7). Egypt thus became one of the most urbanized provinces in the Roman Empire. Alexandria and other cities may have accounted for as much as twenty to thirty percent of its overall population, and this process of urbanization, even if took place on a more modest scale than suggested here, had profound effects on the economy of Egypt.
In Egypt, as elsewhere in the Graeco-Roman world, the concept of the ‘‘consumer city’’ is useful for understanding the complex relationship between the urban and rural economies (Erdkamp 2001). According to this model, the urban economy of cities depended on revenues from the countryside, including taxes and rents or other income achieved by landowners resident in cities. The primary engine of the urban economy was the demand created by landowners for goods and services to support their urban households. Cities were not first and foremost centers of production that derived their wealth by producing manufactured goods for distant markets, although there is no doubt that almost all cities did this to some extent. Urban economies also developed around the need for rural producers to market their crops. Thus the maintenance of a market infrastructure created a whole host of related industries, such as shipbuilding or the manufacture of ceramic vessels to transport crops. Egypt was well situated to benefit from rural production and use it to create wealth in cities. The Nile, with the proximity of almost all major urban centers and even villages to the river or canals connected to it, provided a transportation network unmatched anywhere in the Graeco-Roman world (Rathbone 2007). Virtually all cities in Egypt were in a position to transport cash crops to Alexandria and other urban centers. To cite an extreme example, in late antiquity, it appears that olive oil produced in the Dakhla Oasis could be marketed in the Nile valley, some 300 km distant (Bagnall et al. 1997).
An important question for Egypt, as for other parts of the ancient world, concerns how the development of cities affected conditions in the countryside. One possibility is that it was largely wealthy landowners resident in cities or the state that profited from rural production, and that the development of cities drained resources from the countryside and provided little in return. Although it is impossible to quantify this, the documentary papyri offer the strong impression of the continued vibrancy of the countryside and the persistence of crafts and other types of production there. Indeed, most of our documentation for the organization of crafts and industries comes from a rural setting, primarily villages in the Fayum or the Oxyrhynchite nome. This situation suggests that much of the wealth generated from the agricultural economy remained in the countryside and was not simply siphoned off to the city, either in the form of taxes or rents for elite landowners.