The economy of ancient Greece

The economy of ancient Greece was originally based on the house or oikos, from which the word economy originates. In the Mycenaean palaces, and later Archaic strongholds, the household was the original unit for the production and distribution of goods. The original economy was primarily based on agriculture. The ideal was that the household could produce enough food for the family, a type of autarchy, or a self-sufficient system. The major products produced on the family farm were grain, perhaps olive groves, goats, sheep, and chickens. In addition, the household would make its own clothes, pottery, and tools as needed.

Once city-states began to develop, there naturally was an increase in surplus goods and the creation of standardized products, which in turn promoted the rise of factories or workshops specializing in the manufacture of one type of goods. The most important early factory produced pottery, and workers (often slaves) were employed to produce pots, amphorae, and jugs. To produce large numbers, cities and shops required some kind of special equipment, such as kilns and pottery wheels, which in turn allowed rapid production and more workstations. In addition, artists in the workshops were promoted and developed.

Additional shops included tanneries for the production of leather; wagon makers, shoemakers, clothing manufacturers, including dyers and weavers, and specialized professions related to ship construction and outfitting. These shops arose during the age of the tyrants (ca. 650-500), allowing further development of the cities.

Another major industry was mining, such as at the rich silver veins discovered at Laurium in Attica. Slaves were employed to dig shafts and mine the ore for the state. Slave owners would rent out their slaves to the state to perform this work, which demonstrates that slavery and industry were private and still related to the household. The slaves used picks to break apart the stones, and then they filled baskets with ore and carried it out or loaded it in bays and then passed it from man to man since the underground galleries were only wide enough for one.

The profits were immense, capable of building the Athenian great fleet and the structures in the city-state of Athens. When the mines were captured by the Spartans during the Peloponnesian War, the economy of Athens nearly collapsed. Metallurgy was also advanced when the ore was crushed by mortars (worked by slaves), and then the mills ground the ore by turning stone and the fine ore was washed and the metal ore collected and smelted in furnaces in which lead was separated from the silver. The silver at this point was nearly 98 percent pure.

Another industry, just as extensive and crucial, was the quarrying of marble and stone. Again, slaves would drive metal chisels into the stone and break the marble into slabs. These pieces of marble were then transported to workshops where artists would shape them into statues or use them for the facing of buildings. Other factories included shield workings, which employed over a hundred workers. Since most cities needed soldiers, these workshops and others producing military arms and clothes were essential. In Athens, such materials probably were made to order at first, but later they seemed to be standardized and produced constantly. Since each factory was private and independent, there were no corporations or unions. Typically, fathers handed down their trade to their sons.

Once a city produced a surplus of goods, it was necessary and desirable to sell the goods outside it. Transport was difficult since the roads were not well developed and poorly constructed (in fact, they usually were just made of dirt). Bridges were not well built either, usually being earthen dikes that washed away after rainfall occurred. Land transport was usually used for short distances due to the cost and aggravation. Sea transport was cheaper, but also precarious.

There were no exclusive passenger ships at this time, with travelers paying for passage on freighters that offered few luxuries, but on the other hand did not charge much either. Ships were propelled by sail, and if needed by oar. Merchant ships relied mainly on sails, while warships used both sails and oars. Athens imported most of its grain from southern Russia, which required many ships. Many merchants would insure their cargo at a high cost. Many court cases refer to the culpability of the captain if weather or negligence were involved in an accident so as to collect on the insurance in case of weather or hold the captain personally liable forcing him to pay.

To facilitate the transport of goods and promote trade, the Greeks, and in particular the Athenians, developed banks. Although most people did not use banks, preferring to keep their money at home, merchants used them to allow transactions to be made without needing to transport funds from city to city. Some Athenians would lend money at 18 percent per year as seen in ancient texts, usually to provide mortgages and fund risky operations such as long-distance trading.

There were “state” banks, so to speak, in the form of temples, with the Temple of Apollo at Delphi acting as an international bank. Another form of banking was the money changer, who not only exchanged monies from other cities but also lent money, with interest rates varying from 12 to 30 percent.

Trade ultimately became the backbone of the Athenian economy. Many producers sold their wares to an intermediary, who in turn sold them to local shops, and then to consumers. In addition, goods were sold in the streets. Slaves, freemen, and metics would come to the shops to haggle and buy goods, but free aristocratic women did not go there. Trade by sea was crucial. The local producers not only made their goods for domestic sale, but transported them to cities throughout the Aegean.

The Piraeus, with its docks, warehouses, banks, and markets, allowed Athenian trade to prosper. A variety of goods came to and from the Piraeus. The Greek colonies allowed not only for the selling of goods abroad, but also for the purchase of local goods to ship home to the mainland. To accomplish trade and commerce, the need for coinage was crucial since it allowed the easy exchange of goods.

Every city had its own coinage, with varying weights. In many cities, the coinage’s purity was manipulated or even debased. The Athenian owl became the standard symbol on coins, and they were known for having a constant purity and weight. The normal coin was made of silver. In each city, the money changers would exchange foreign coins into the local currency for merchants to use (for a price, of course).

The Greek economy was based on the available personnel, with machines virtually nonexistent. In most cities, free citizens cultivated the land since the local farms were mainly operated by the owner, his family, or free tenants. Only in Sparta did a servile class work on and cultivate farms. The economy in the city was based around a mixture of free and servile classes. Many of the small shops were run by the family, while larger productive centers used a mixture of freemen and slaves.

There were also many freemen or metics who were foreign born and came to Athens for economic opportunities. Although they did not vote or participate in the government, the metics became the professional craftsmen, artists, contractors, and managers of the city. Added to them were the freedmen who were former slaves. Most of these were former slaves who knew the family business and still loyally served their former masters.

The economy of Greece, and especially Athens, was based on the concept of the household. It was structured like a household business and viewed as an extension of the traditional family and his farm.