A market economy thrived in ancient Greece long before it was originally thought — meaning an economy existed that responded to the law of supply and demand three thousand years earlier than had been previously believed.
By analyzing sediment cores taken from six sites in southern Greece, an international team of researchers identified trends in cereal, olive, and grapevine production indicating major changes in agricultural production between 1000 BC and 600 AD.
These changes mean that Ancient Greece had a market economy that responded to the law of supply and demand fully three thousand years earlier than had been previously believed.
This would again make Greece the location of another first in the world — the first market economy on the globe.
This also means that Greece had a relatively sophisticated market system as far back as 2,600 years ago, even before Athens became a democracy under the great statesman Pericles.
International trade came before the rise of democracy
Instead of simply eking out a living by planting whatever the local villages wanted and desired, farmers as far back as the Archaic era were already planning their crops according to the needs of international trade.
This means that separate individual markets for a consumer good would become merged with others to form one large market, aimed at large-scale trading.
Adam Izdebski of the Jagiellonian University in Krakow, Poland and the Max Planck Institute for the Science of Human History and his colleagues, in a paper published in the November 2020 edition of The Economic Journal of Oxford University Press, are saying that this is proof that a true market economy existed in that era.
It has long been known that trade existed between groups of people as far back as the Neolithic era, before man had invented the wheel or even domesticated horses. And the concept of money and even counterfeiting was extant as far back as those times.
But now, researchers have combined varying fields of scientific research to provide evidence for a market economy in ancient Greece — even including areas around the Black Sea where Greeks had settled — characterized by integrated agricultural production and a major expansion of trade.
As a matter of fact, the researchers state, the closer the farmers were to the Black Sea, the more marked this effect was. These people were already extremely reliant on importing grains, in exchange for which they would export olive oil and wine.
Specialization in olive and grape cultivation
“To be able to pay for the imports, there is specialization in olive and vine cultivation. What we showed, existing much earlier than Roman times, is how deep the reliance of trade was to survival,” Izdebski points out.
In the field of economics, the concept of a market economy is largely considered a modern phenomenon.
Influential economists such as Karl Marx and Max Weber, for example, argued that although markets existed in antiquity, economies in which structures of production and distribution responded to the laws of supply and demand developed only as recently as the 19th century.
A recent study by an international team of researchers, however, uses palynology — the study of pollen remains extracted from cored sediments — to challenge this belief and provide evidence for an integrated market economy existing in ancient Greece.
Market integration began much earlier
Using publicly-available data from the European Pollen Database, as well as data from other investigators, researchers analyzed pollen from 115 samples taken from six sites in southern Greece to measure landscape change over the years studied.
Using radiocarbon dating, researchers followed the change in percentage values for individual plant species between 1000 BC and 600 AD and observed a decrease in pollen from cereals, a staple of the ancient Greek diet, during a period of apparent population growth.
The pollen data cannot prove which cereals were the most commonly grown but Izdebski says that “written sources show wheat was preferred.”
This decrease occurred at the same time as an increase in the proportion of olive and vine pollen. These trends raise an important question: why would local producers choose to plant olives and vines instead of cereal grains, when the demand for this staple food must have been high, and continuing to grow, as the population increased?
In the new study, researchers argue that pollen data from southern Greece reveals an export economy based on cash crops as early as the Archaic period, primarily through olive cultivation.
Although archeological evidence from these periods documents the movement of goods, quantifiable data on market integration and structural changes in agricultural production have up until now been very limited. “In this paper,” says lead author Adam Izdebski, “we introduce pollen records as a new source of quantitative data in ancient economic history.”
From mud to market in ancient Greece
Before arriving at their conclusions, researchers compared the trends they observed in the pollen data with three other sources of data in their groundbreaking scientific research. First, they observed a decrease in pollen from uncultivated landscapes corresponding with each increase in the numbers of people living in settlements.
Researchers then looked for evidence of increased trade activity as seen in Mediterranean shipwrecks, which are routinely used to estimate maritime trade and overall economic activity.
After restricting their search to wrecks from the appropriate period and region, scientists then observed trends in shipwrecks in both the Ancient Greek and Roman eras consistent with trends found in cereal, olive, and vine pollen and cultivation.
Both sources of data suggest an economic boom in the 1st and 2nd century AD, a decline in the 4th and 5th century, and a smaller boom in the 6th century.
Finally, researchers examined trends in the presence of large-scale oil and wine presses in the Mediterranean. The presence of these machines, although not located in Greece, indicates a pattern of broad economic trends in the region and changing incentives for the production of large quantities of olive oil and wine.
Again, the researchers found that trends in archaeological findings of oil and wine presses were consistent with trends in cereal, olive, and vine production.
As the emergence of integrated markets and capitalist economies of the early modern era is believed to have been at the roots of the Anthropocene, the current epoch, in which humanity has become a major geological force, this study shows that the structural developments that occurred on a large scale through European colonization from the 15th century onward were indeed possible several thousand years before.