The Roman Commercial Revolution

Faeelin

I'm relatively sure that the Romans knew a kind of banks and credits. A stock exchange is another thing, of course.
Click to expand...

Hmm. This is so intriguing that this suggests a POD.

"Roman banking may have been largely monetized, but it also displays a distinct lack of sophistication in the use of money in comparison with Italy after the commercial revolution of the 13th century. In Medieval Italy it was possible to make payments by transfer between different banks, and both cheques and negotiable paper came into existence. Perhaps even more important was the bill of exchange, which which proved vital in the development of commercial exchange in Europe in the 13th century. "

So far, so good. But what about Rome?

"In the roman world, outside of Egypt, there are no traces of affiliation between banks in different places.... this means that, indefault of any clearing system, banks could not be used to transfer funds from one place to another. Perhaps even more important... there were no bills of exchange and no negotiable paper. Furthermore, cheques.... are unknown outside of Egypt."

Furthermore, "Even in Egypt cheques relied upon trust of the payee (there was no relevent legislation[1]) and there is no evidence that cheques could be endorsed so as to become negotiable. The vulnerability of banks, in which interest bearing deposits could be withdrawn on demand and partnerships were dissolved by the death or wish of one party, cannot have been conducive to the devleopment of complex procedures, or to the full use of such services as were offered."

"In the Roman world the possibility of moving funds without the physical transer of coin was confined to the elite, who could rely on friends with widespread interests, or to those who, like governors under the Republic, could make private use of the system for the transfer of tax revenues through publicani. Under the Principate there appears to be no evidence of private individuals taking advantage of the government's mechanism for the transfer of revenues or through the publicani."

And, tantalizingly, for the purposes of a WI, "Part of the explanation for the explanation for the lack of sophistication of Roman banking may be that banks were not, for the most part, used by the elite".

Hmm. I'm thinking the best POD would be something with the Publicani, but I'm not sure.

Thoughts, anyone?

The Supply and Use of Money in the Roman World, 200 BC to 300 AD. It's in Volume 82 of the Journal of Roman Studies




[1] Does anyone else think that seems odd?
 

Faeelin

Some notes on the publicani:

"Hmm. On the other hand, the Principate and late Republic had the
publicani, which are about as close to corporations as the world was
going to get for centuries. "The existence of the societas publicanorum
did not - to alarge extent - depend on the individuals involved; a
representative could act 'for the company;' ownership was fungible,
traded in the form of shares andd separated from the control of the
company."

"We also learn that the shares were traded. In his second speech
against Verres (1,55,143), Ccero implies the transferability of shares, when he quotes an exceptional restriction: Qui de L. Marcio M. Perperna censoribus redemerit... socium non admittito neve partem dato neve redimito, i.e. anyone who had been leasing under the censors L. Marcius and M. Perperna was not admitted to the current lease, neither as a partner, nor as a shareholder, nor should he be allowed to buy any shares later. His quote and the context of the case reveal that shares were often traded between participes after the contract had been assigned to a societas publicanorum.


What makes the partes look even more like modern shares - and is
additional evidence partes were not just loans with variable interest rate, as proposed by Duff45 - is the mention of variable "stock prices." In P. Vat 12,29 Cicero speaks of partes illo tempore carissimae, of 'shares that had a very high price at that time.' He implies that the value of the shares depends upon the success of the enterprise and was as such subject to fluctuations, just like today's stock market. In fact, the "stock-market jargon" in this and
similar quotes have led some scholars to believe that a "stock-market
life" existed in Rome [2].46'


http://faculty-gsb.stanford.edu/malmendier/personal_page/Papers/Shares%20in%20Ancient%20Rome%20version%2011sep2003embedded.pdf#search='publicani'
 

Faeelin

I've been reading Economies Beyond Agriculture in the Classical World, and it's had some interesting comments on this as well. In particular, J.F. Drinkwater, a specialist in Roman Gaul, discusses the Gallic economy.

"If there was a significant development in a major sector of the Gallic economy under the Roman Empire, then it surely had the potential to generate wider socio-economic change. I must emphasize that what I propose here is not mmediate or social change.... Rather, I have in mind the slow but constant.... technological economic, social and political change. In this, the textile industries of Italy, England and Flanders played an indispensable role. It is surely permissible to argue that, given the more favorable conditions of the High Empire, a significant Belgican woollen industry should have been in a much stronger position to influence society than its medieval successor."

He places an interesting era for this to have occurred amongst the Secundinii, a people of the Treverii. Even in OTL, their society was, based on inscriptions, involved in industry and trade. The traditional aristocracy was largely eliminated/weakened following the political troubles of 69-70 AD.

"The earlier aristocracy appears to have been replaced by a new decurial class that was not avese to trade, created from traders who were ready to continue trading, or lesser aristocrats happy to receive traders into their ranks and be involved into their ranks and be involved in their continuing activities, or both... It is surely plausible that the existence of such [persons] might indicate a blurring in social distinction between landowners and traders among the Treveri, possibly even the emergence of a Treveran bourgeoisie."

But, "however much we may argue for the existence of great seconomic and social potential in Gaul under teh High Empire, we have to concede that this was never realized... the Gallic woollen industry did not act as the locomotive of continuing economic, social, and political change".

Why did this happen?

"1. Political failure prevented Gallo-Roman manufacturers and traders from attaining levels of wealth and status beyond those accessible through commercial activity alone.

2. This limitation prevented them from promoting the interests of industry and commerce to such a degree that the distinct identity and importance of these activities remained unrecognized by the society that accomodated them and depended upon them.

3. The result was that... the basic economic values of a peasant-society, self sufficiency based on landholding, remained unchallenged; a major factor in preventing the take-off of the ancient economy. "


Intriguingly, he suggests that this didn't occur because as the Treveri economy developed, Trier became important as a center of imperial administration, and suggests that "the presence of imperial personnel inhibited the social development of the area as a highly commercialized civitas by reinforcing traditional social prejudices against trade."

He suggests several benefits to manufacturers and traders who win political power. "Individual manufacturers and traders who win power and status for themselves may serve to raise the status of manufacturers and traders as a whole, forcing some erosion of the dominant social position of landowners. Equally, individual manufacturers and traders who use their power and status to wring commercial concessions, rights and priveliges from an administration to promote their own trading interests may well help to improve the operating environment of manufacture and trade as a whole."


Finally, "the raising of the status of manufacturers and traders, and the pressing of commercial interests, may compel recognition of the important place of manufacture and trade in contemporary society. medieval clothiers, and other manufacturers and traders, made this breakthrough. Why did Gallo-Roman clothiers fail to achieve anything like this success?"

Drinkwater suggests that this was due to "the absence of significant state-borrowing in the Roman empire". In th emedieval world, wool merchants would lend money to princes short of funds; and by doing so, they won the royal ear, since rulers, dependent on such loans, took advice from such clothier-financiers and rewarded them for their service. These merchants formed small, but significant commercial lobibies, for promoting trade for its own sake. But "neither state-borrowing nor the commercial bending of the imperial ear played any important part in the economic life of the Roman empire. Their absence may, therefore, be identified as a structural weakness".

Hmm. I can think of at least one Roman, with an involvement in business, and an influential position in politics.

Crassus.

Thoughts?
 

jolo

Astonishes me that Rome was that advanced already. Especially as such shares could also have been used as cheques, credits and even loans. There obviously wasn't any need or desire to do anything with those shares outside of Rome.

Gives additional credit to my theory put up in another thread that the movement of the Roman capital to Constantinople did harm Rome at least somewhat.

A single lawmaker/emperor protecting share holders and companies with a few suitable and sufficiently liberal laws (maybe even covering similar agreements like loans with fixed interests) could have been enough to start the Renaissance 1000 years earlier.
 
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