Business Models in Antiquity

We cannot, of course, exclude the Assyrians with their long history of commercial success: Assyrian merchant princes, called tamkaru, were everywhere, and every kingdom in the region hired the equivalent.

Globalist Bookshelf; Global History
August 03, 2009

Phoenician coin

By Karl Moore and David C. Lewis
Karl Moore, a business professor at McGill University, and David Lewis, a historian, look at ancient international business in “The Origins of Globalization.” In the first of a two-part series, they describe the economies of Assyria, the Phoenicians, Greece and Rome — and how much they valued merchants.

Who has not heard of the Phoenicians, the great seafarers? Their blood flows today in the Lebanese, Syrians, Cypriots, Maltese, Italians, North Africans, Spanish and Portuguese.

Their legendary voyages brought them from Lebanon and Syria to Britain, West Africa and possibly even to the New World.

The border between private and public was often fuzzy in the Bronze Age. Private merchants served the king, and the king outsourced royal duties to private merchants.

Here were the true pioneers of seaborne and intercontinental trade, the role models for Venice, Genoa, Portugal, Spain and maybe even Holland, Britain and Japan.

The Phoenicians were not the first ancient people to sponsor long-distance seaborne trade, but they and their Carthaginian children were the first to perfect it. They are the real pioneers of what we will call maritime capitalism.

How did they do it? By taking advantage of a unique window of opportunity. During the Middle Bronze Age (traditionally dated to the first half of the second millennium BCE), first Babylon and then Egypt dominated the Middle East. As their power faded, no single power dominated.

In this climate of peace and stability, trade took the place of war. Babylonia tried to revive old trade ties in the Persian Gulf. Crown-sponsored commercial establishments were planted on the rich metal-producing island of Bahrain (ancient Dilmun) to the south.

Another trading center, at Dur-Kurigalzu near today’s Baghdad, controlled the mountain passes to the horse-breeding regions of Iran in the east. The aggressive Babylonian Empire of Hammurabi was long gone — and would not return until Nebuchadnezzar revived it 600-700 years later.

Other kingdoms enjoyed the chance to “make money, not war,” including those such as Egypt, Tiberani and the Mycenean Greeks as well. We cannot, of course, exclude the Assyrians with their long history of commercial success: Assyrian merchant princes, called tamkaru, were everywhere, and every kingdom in the region hired the equivalent.

The tamkarum was at one time a government employee, but many of them later traded for personal profit. They became private merchants with public duties.

One of the main issues of the time was how to deal with the abuses of capitalism, both state and private.

If there is no such thing as a free lunch, history makes it plain there’s no such thing as a truly free market. The border between private and public was often fuzzy in the Bronze Age. Private merchants served the king and the king outsourced royal duties to private merchants.

International business law came into its own as kings drew up treaties and rules to supervise the comings and goings of each other’s merchant princes. Akkadian, a Semitic language ancestral to Assyrian, became the language of international business.

Business activity was helped by the fact that literacy was talking hold. Most of the great literature of the ancient Middle East was written down during the second millennium BCE.

In many palaces and chancelleries of the Fertile Crescent, a newly recruited class of court and temple scribes preserved and transcribed the ancient religious epics. They discussed the theology of suffering, injustice and morals — and helped codify state law.

One of the main issues of the time was how to deal with the abuses of capitalism, both state and private. Stabilizing markets and protecting property became very important. A Hittite law was designed to protect royal and royally authorized merchants trading in foreign lands:

“If anyone kills a merchant (in a foreign land), he shall pay 4,000 shekels of silver. He shall look to his house for it. If it is in the lands of Luwiya or Pala, he shall pay the 4,000 shekels of silver and also replace his goods. If it is in the land of Hatti, he shall also bring the merchant himself for burial.”

International business law came into its own as kings drew up treaties and rules to supervise the comings and goings of each other’s merchant princes.

Cattle-and sheep-rustling was a big problem, and so was embezzlement from the royal granaries. Stealing of plows, wagons and shady real-estate dealings also incurred heavy fines.

Kings still regulated wages and prices, usually fixed in silver shekels — each one worth about eight grams, or five U.S. dollars. A plow was worth $12, a sheep, $1, a horse, $20. A vineyard was worth 40 shekels for 3,600 square meters.

Equal pay for equal work did not exist. A man hiring himself out “for wages, to bind sheaves, load them on wagons, deposit them in barns and clear the threshing floors” was to be paid 1,500 liters of barley for three months’ work. A woman was to be paid only 600.

A stable system of regulated trade existed among the kingdoms of the Middle East, with extensions into the Aegean and even Europe. This Late Bronze Age balance of power (traditionally dated post-1500 BCE) and managed trade was something like what existed in Europe in the 1700s.

It was especially good for the city-states of Syria and Palestine. The region was well-suited by climate, location and background to serve as the middlemen of the ancient world.

The first time we hear of Greater Syria is in the annals of the earliest pharaohs. They record royal expeditions in search of cedar pine and cypress before 2500 BCE. Nobody would call these people Phoenicians or even Syrians for hundreds of years.

The name "Phoenician," the Greek term for "purple," was later applied to these coastal people because of the world-famous purple dye they harvested. Purple robes were, after all, considered the "power clothes" of the day.

Equal pay for equal work did not exist. A man hiring himself out “for wages" was to be paid 1,500 liters of barley for three months’ work. A woman was to be paid only 600.

Syria at the time was dominated by the city of Ebla, near the Syrian city of Aleppo. Until it was burned and destroyed around 2300-2200 BCE, Ebla was the richest and most liberal realm of the day. Byblos seems to have been the chief port of entry for gold shipments coming from Egypt and Africa on the way to Ebla.

Byblos began to take advantage of its strategic location on the Mediterranean shore of the fertile crescent. The structure of merchant princes was married to a mighty naval establishment. Merchants became admirals and vice versa. They sailed first to Greece and then under Tyre began to plant colonies from Babylonia to Spain.

If the merchants of Syria and Lebanon planted the seeds for the western flank of the future "hemispheric" economy that arose in the Roman Empire, Chinese officials and theorists were planting other seeds far to the east.

Editors Note: Part II of this series, which recounts how ancient China’s development shows many parallels to modern times, is available here. This feature is adapted from "The Origins of Globalization," copyright Karl Moore and David C. Lewis 2009. Published by Routledge. Reprinted with permission of the publisher.