History of the Economy of Ancient Greece

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Perspective

The history of the economy of ancient Greece was defined by its dependence on imported grain and goods. The poor quality of Greece’s soil made the security of its food supply supremely important. This impact was mitigated by Greece’s command of Mediterranean trade and of some of Egypt’s most important seaports and trade routes. Its craftsmanship and maritime commerce became the most prominent aspects of the ancient Greek economy.

Greek commerce was dominated by a class of traders known as emporoi. The state collected a duty on their cargo. At Piraeus (the main port of Athens), this tax was set initially at 1% or higher. By the end of the 5th century, the tax had risen sharply. In 413, Athens ended the collection of tribute from the Delian League and imposed a 5% duty on all the ports of her empire in the hope of increasing revenues. These duties were not protectionist, but merely intended to raise money for the public treasury.

The growth of trade in Greece led to the development of finance. Most merchants, lacking sufficient cash assets, resorted to borrowing to finance all or part of their expeditions. A typical loan for a large venture in 4th century BC Athens, was generally a large sum of cash (usually less than 2,000 drachmas), lent for a short time (the length of the voyage, a matter of several weeks or months), at a high rate of interest (often 12% but reaching levels as high as 100%). The terms of the contract were always laid out in writing, differing from loans between friends. The lender bore all the risks of the journey, in exchange for which the borrower committed his cargo and his entire fleet, which were seized upon their arrival at the port of Piraeus.

Trade in ancient Greece was free: the state controlled only the supply of grain. In Athens, trade regulations were reviewed by a specialized committee overseeing the trade in wheat, flour, and bread. One of the main drivers of trade was colonization. As larger city-states set up colonies, trade grew between the founding city and its colony. Furthermore, differing climates between cities and their colonies created comparative advantages in goods. For example, colonies in Sicily would often have better weather and be able to export grain to more populous cities. Larger city states often exported more value-added goods, such olive oil, back out to colonies. The number of shipwrecks found in the Mediterranean Sea provides valuable evidence of the development of trade in the ancient world, and indicate a very large and sustained increase in the volume of trade.

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Agriculture

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