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Original written by professor Rolf Strm-Olsen, IE University. Original version, 8 February 2013. Last revised, 12 December 2013 Published by IE Business Publishing, Mara de Molina 13, 28006 Madrid, Spain. 2013 IE. Total or partial publication of this document without the express, written consent of IE is prohibited.

At first glance, this reading concerns a highly specific topic: the logistics of the trading system that existed to bring grain to the city of Rome and the responses that emerged during the early Roman Empire (known as the Principate) to manage that trade. It is, however, designed to invite reflection upon more general questions: how do complex markets work, why do they work, how can we comment upon them meaningfully, and how do the details reflect upon the whole. Imagine, for instance, if you had to explain how a car was powered. You could provide a very general overview, explaining that gasoline-fuelled combustion drives pistons that in turn make the car move. But if you wanted to truly understand the whole process, you would need to consider the specific parts of the engine, their function and how they worked. In essence, by considering just the logistics of the grain trade that existed in the Mediterranean during the Roman world, we are getting under the hood, not only of the Roman economy, but of markets in general. It gives us an opportunity to see how complex systems evolve, how they prosper, and eventually how they can crumble. Keep this in mind as you are reading. I have written this article to bring together the findings of scholarly works in a language that is accessible to the non-specialist. It is necessarily rather brief, but if you would like to know more about any of the issues discussed, I have provided notes as a guide to further reading.


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Even by todays standards, ancient Rome, the capital of the Roman Empire and the centre of its st * political and cultural identity, was large. With a million inhabitants or more by the 1 century CE , it was, by pre-modern standards, simply enormous. It is not hyperbole to suggest that if a typical subsistence farmer managed to find his way to the city, he would have encountered more people living in Rome than he could have imagined populating the entire globe. It is difficult to say with any precision the actual population of Rome during the length of the Roman Empire. But based on what evidence we do have (and this includes, importantly enough given the topic at hand, the number of people who were on the so-called grain dole), the city was already nd st very large during the later Republic (2 and 1 centuries BCE), likely well over half a million inhabitants. And during the centuries that followed the city remained near or above a million rd inhabitants, until the decline of the Western part of the Roman Empire in the later 3 century. Rome was therefore the largest city the world had ever seen and, in the West, would see, until it th was finally surpassed by London in the 19 century.1 Consider for a moment what this city looked like had you visited in the first or second century CE. Starting from outlying fields, you would walk into the city along one of the many broad and wellpaved roads (those that famously all led to Rome), choked with the congestion of horses, pedestrians, carriages, and carts. You would walk past outlying suburbs (a Latin word), with various signs and monuments lining the sides of the street, as well as numerous vendors offering you street-side goods. You would pass industrial areas mills and furnaces, for instance busy with workers. As you got nearer to the city centre, the population density would increase, until you approached one of the numerous city gates that were built out of the old defensive wall, and which had long fallen into disuse since by this period, the city had no need to defend itself from outside attack. Walking down a central street of Ancient Rome, you would have been struck by the noise of constant hawkers and horses, the pollution of burning fires, and a crush of people crowding the cobblestones of the streets. You would have found numerous storefronts selling everything from textiles and pottery to fast food. (Roman fast food outlets were as, or maybe more, ubiquitous than our current fare of chain restaurants.) Above the stores, all across the city, buildings rose six stories or more, darkening the streets below. We can get a sense of just how many people crowded into the city environment of Rome by the scale on which the Romans built their public buildings. The famous Roman hippodrome, called the Circus Maximus, is now just grassy bowl. But for centuries it entertained perhaps up to 100,000 people with live chariot races and other spectacles. The Colosseum, which still dominates the modern city centre, could seat at least 50,000. The baths of Caracalla, built at the very end of Romes glory days, featured an Olympic size swimming pool, and could serve several thousand bathers at a time; perhaps as many as ten thousand people a day came to wash themselves and exchange gossip with their fellow bathers. The scale of these and other public buildings serve not only as an emphatic testament to the extraordinary size of the city, but further underscore how exceptional this achievement was. Being able to sustain a population of that size involves any number of challenges, but I want to focus on the most important one: food. Given their more energetic lifestyle, it has been estimated that the average Roman needed a daily requirement of around 3,000 calories a day. With a population of a million people (or more), this meant that the city of Rome needed to provide roughly 3.0 billion calories daily, or about a trillion calories annually. Table 1 quantifies that daily nutritional requirement in terms of the typical foodstuffs of the Roman world. For a pre-modern economy

* 1

Common Era, which marks dates from the year 0, as opposed to BCE, or before Common Era. See Walter Scheidel, "Roman population size: The logic of the debate." In People, Land and Politics: Demographic Developments and the Transformation of Roman Italy, 300 BCAD 14 (2008).


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without the benefit of the efficiencies of agro-business, fertilizer or mechanisation, the numbers seem staggering. Yet, this was what had to be brought into the city per day. Less, and the population would starve.

Ancient Rome's Daily Caloric Requirements expressed in Basic Foodstuffs Foodstuff Honey Olive Oil Wine Wheat Percentage 10% 30% 10% 50% Metric tonnes/day 117 119 412 629

Typically in the pre-modern era, cities relied upon the surrounding area (called a catchment area) to provide sufficient surplus agricultural production to sustain the urban population. That area was surprisingly small, since the cost of transportation over land was, until the modern era, prohibitively expensive beyond a relatively short distance perhaps up to 50km (although some scholars have suggested a greater distance). For many town settlements, this imposed a natural population boundary above which the population could not grow, since not enough food could be obtained. The only economical way to transport goods in quantity over any longer distance was by boat; this remained true until the modern day, which is why all the larger cities of the pre-modern world are port cities. Even with a favourable river- or ocean -side location, cities ability to supply large quantities of food imports with reliability was limited. There were other constraints to urban growth, but securing sufficient food was one of the most basic. As a result, between the fall of the Roman th Empire until the Industrial period in the 19 century, no European cities could grow much beyond one hundred thousand residents. And the vast majority were an order of magnitude smaller again. Rome, by contrast, was an order of magnitude bigger. Given the serious challenges of reliable provisioning, how was this possible? The answer derives from the political, military, economic, and social conditions that were created as the Roman Empire started to expand aggressively, starting roughly with the military successes of the later Republic (think of Julius Caesars pithy military dismissal of Pharnaces II, a Roman rival: veni, vidi, vici) and culminating with the successful campaigns of the Emperor Trajan (98117CE), who pushed the Roman frontier to its maximum extent. During this period and extending for another century thereafter, the city of Rome was able to maintain itself as a massive, thriving metropolis. The size of the Roman Empire, both in terms of population and land mass, represented an unprecedented political unification of Europe and the Middle East (see figure 1).


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More importantly, the various possessions that comprised the Roman world became integrated economically, meaning that there was an active trade between the various parts of the Empire, although scholars still disagree over its extent. Nonetheless, evidence of that trade abounds in archaeological remnants, literary references, images, numismatics (coins), and other sources that historians of the ancient world have used to reconstruct the Roman world. One important testament to that trade comes from the amphorae (containers) that were commonly used to transport commodities (see figure 2).



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These were often marked with information about the goods being transported (called tituli picti), including the merchants name and the origin of production. Remnants of amphorae with diverse points of origin have been found all over the former Roman world, suggesting that the scale of trade was large and its scope contiguous with the geographical reach of the Empire (see figure 3).


If the overall degree of economic integration remains a matter of some dispute, there is no doubt that certain regions of the Roman world developed specialised production. The Roman province of Baetica (modern Andalusia), for instance, specialised in the production of olive oil, as did parts of the province of Africa (today in Tunisia). There is ample evidence that millions of metric tonnes of olive oil were shipped from Iberian and African ports to the city of Rome over the span of roughly two centuries. Because olive oil has a very favourable weight to calorie ratio, it became a staple of the Roman diet. So, too, did wine, which was widely consumed across the Roman Empire and which came from regions that still today are known for their production (Greece, Italy, Spain, and France). Finally, there was grain, and especially wheat. It is hard for us today to imagine just how central wheat was to the Roman diet, but it perhaps accounted for as much as 80% of the average caloric


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intake. It was, in other words, the fundamental staple food of the Roman world, and for the 2 inhabitants of the city of Rome itself. I distinguish between the Roman world and the city of Rome, because certain climates are much more favourable to the production of wheat than others. Crop yields in the catchment area around Rome were relatively low, which makes it something of a surprise that the city would come to rely so extensively on the food source as the central part of its diet. But this is explained by the fact that elsewhere yields were much higher, especially those of North African fields. During the Roman period, the North African climate was significantly wetter and more temperate than today, furnishing ideal conditions for grain cultivation. As a result, the leading centres for grain production across the Roman world were the Roman provinces of Egypt and Africa. Perhaps as much as three quarters of all wheat consumed in the city of Rome came from these regions. While this offered an extraordinary opportunity of agricultural surplus for the Roman world, it also brought with it extensive complications and challenges that implicated a swath of practical matters, such as finance, price information and transportation logistics. Since wheat played such an important dietary role, the city of Romes size exerted an impressive gravitational pull on the overall trade in wheat. By the late Republic (say ca. 50 BCE), the problem of securing enough grain for 3 the city of Rome had reached alarming proportions. So lets turn to the system that developed in order to surmount that problem.


Of the two grains common to the Ancient world, barley and wheat, it was the latter that became the ubiquitous foodstuff across the Mediterranean world. Wheat is not the easiest crop to grow, nor to ship, and its use as a central source of nutrients occasioned numerous challenges of supply, transportation, and distribution. Because it played such a central part of the Roman diet, however, we happen to know quite a bit about the way in which it was supplied to the city of Rome. Indeed, of all the commodities traded during this period, the evidence surrounding the trade in wheat is probably the most ample. There are four observations that may be made that underscore the challenges implicit to this trade. First, in order to provide healthy yields, wheat requires both suitable soil and sufficient rainfall. In the Italian peninsula, yields must have been rather poor, since the soil characteristics were not ideal. Yields on seed were probably less than six-fold (with a few exceptions where the soil was particularly suitable). Only in the Nile delta and parts of North Africa were yields consistently high 4 perhaps as much as tenfold. Second, wheat requires a minimum rainfall of 400 mm. Less and the entire crop would likely fail. In regions where crop irrigation was dependent on rainfall, then, the weather could easily provoke disaster. Third, wheat (like other grains) is heavy and bulky to move about. Grain stacked to a height of 2 2 metres exerts a downward pressure of roughly 1,200 kg/m .5 When stored loose, it easily shifts around. It can thus also exert considerable lateral pressure as well (up to two-thirds of the vertical pressure) depending on the container shape. Merchants who shipped grain had to ensure that their ships were sufficiently strong to withstand the potential pressures that could occur during voyage as the grain sloshed around the hold.

2 3

The most recent text is David Kessler, Feeding Rome: the Roman grain market, 200 BC-200 AD (Harvard, 2004) G.E. Rickman. The Grain Trade Under the Roman Empire, in Memoirs of the American Academy of Rome, vol. 36 (1980), pp. 261-275, p. 263. Italian yields are discussed based on the scanty evidence in J. K. Evans, Wheat Production and Its Social Consequences in the Roman World, in The Classical Quarterly, New Series, Vol. 31, No. 2 (1981), pp. 428-442, at pp. 429-435. My thanks to Joaqun Salanueva for his revisions of the (incorrect) figures published in Rickman (1980).


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Finally wheat breathes after it is harvested, absorbing oxygen and emitting heat, CO and water. Unless wheat is kept cool and dry it tends not only to germinate, but also to foster conditions for moulds and fungi to develop causing the grain to rot. Insect infestations (like nasty grain weevils & beetles) also plague wheat that is not stored properly, ruining it both for human consumption and for reseeding. Wheat growing was therefore vulnerable and variable at all times. Where the best harvests would be, and how much surplus might be available was always difficult to predict from one year to the 6 next. Transporting wheat was equally fraught; special ships with reinforced hulls were needed to withstand the pressures. And storage facilities (both dock- and shipside) had to ensure cool and dry conditions. You will note that I am talking here only about the transport of grain by ship. This is because for a heavy bulk crop like wheat, overland transport was feasible over only the shortest of distances. It has been suggested, for instance, that it was cheaper to send a shipload of grain the entire length of the Mediterranean than to cart it overland 100km (see figure 4)


Thus from point of origin to point of delivery, the cargo was almost exclusively being transported over water, whether river, ocean or canal. Only at the very extremes of the voyage would it have been carried over land. Because of the perils involved in storage and the many intermediaries needed to move the product along the supply chain, wheat needed to be constantly monitored. Towards the end of his life, the Roman senator and philosopher Seneca (d. 65 CE) wrote a tract to his friend Pompeius Paulinus, who was the prefectus anonnae of the city of Rome, which is to say that his job was to oversee the citys distribution of grain to the citizens (more on this below). Go retire to the quieter life of philosophy, wrote Seneca to the bureaucrat, and leave behind the constant grind of supervising the grain supply. He then drives the point home listing what, exactly, that grind entailed: vigilance against fraud and neglect, preventing excessive moisture and heat, and ensuring that the right 7 weights and volumes are being duly delivered. We dont know if Pompeius took his advice, but the
6 7

Rickman (1980), 261. Seneca, de Brevitate Vitae, XIX, 1.


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point was clear enough: supplying wheat to Rome was a vexing and time-consuming business better to be a philosopher. That supply, however, was critical, and numerous papyri, inscriptions and paintings survive that show various stages of the wheat trade and attest to the complexities that men like Pompeius Paulinus were in charge of supervising. In figure 5, we can see a specific aspect of the wheat trade represented. This is from a mosaic found in a building in the port of Ostia, which was a deep-water harbour built near Rome. We cannot know the function of the character at the far left, since his image is obscured, but next to him, we can clearly observe a porter bringing a sack of wheat to the grain hall where the wheat was measured and checked for quality. Next to him, a boy is keeping count of how many sacks have been delivered, possibly indicating with his hand that nine containers have arrived so far. In his left hand he is holding a counting device (called a calculus), to which he adds a small stick for every sack delivered. And, indeed, there are nine such markers.


The three characters on the right are standing around a large modius. We can see the main ** central figure, the measurer or mensor. He is holding a rutellum in his hand as if gesturing for the last sack to be added so the measurement can commence. To his right, in back, a porter holds an empty sack of wheat, having already dumped its contents. Finally, on the far right may be depicted a figure of authority. He is the only one wearing shoes, and his tunic is tied around his waist, indicating he is not engaged in the hard labour of moving the grain (since the tied tunic would constrict his movement). Above the entire mosaic is an inscription (V Sex H Agi Hi), a title which it


Much like the modern system of international weights and measures, the Roman world standardised things like weight and container sizes. For grain, the basic unit of dry measurement was called a modius, essentially a large cylindrical jar that when filled weighed between 6.5 and 7 kg. This special tool was essentially a scraper that could be used to ensure that the wheat evenly filled the entire vessel.


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has been proposed reads V[ilici] Sex H[orrerum] Agi[lianorum] Hi[c], or Here are six workers of the 8 Agilianus Warehouse. Despite the fact that it is limited to only a single moment of grains journey from field to market, this one mosaic image tells us a great deal about the Roman grain trade overall. First, we can see the importance of maintaining controls, carefully counting the sacks delivered, measuring the amounts and determining the quality. Second, we can see a formalised hierarchy of labour, with specialised workers (counters, measurers, stevedores) and supervisors to manage the process. Third, there was a physical infrastructure that was specially devoted to the storage and delivery of grain. Thus, when a shipment of grain arrived at port, there was an established process to move it along its way. Lets step back for a moment from our mosaic and consider how the grain actually got into the hands of our six warehouse workers. It will be immediately clear that a system able to bring large quantities of a commodity that was difficult to transport over large distances, that had to be continuously monitored, and that changed hands between any number of middlemen must have been complex. Farmers, dockworkers, sailors, ship-owners, merchants, and financiers all had a central role. But beyond these obvious agents there is a much larger world that made such a trade possible. Think, for instance, of the engineering needed to design the ships, build the ports and maintain the roads; of the lawyers needed to draw up contracts; and of the judges to adjudicate during moments of dispute. Think, also, of the monetary system that must have existed to allowed a long-distance trade to flourish. This in turn tells something about the state itself. It was capable of exercising control over money. It organised a bureaucracy to ensure the stability of supply. And it had the resources to pay for those roads and ports. It was, in other words, a highly complex supply chain, supported by an extensive physical and social infrastructure, that drew in all features of the Roman world. Indeed the grain trade was made possible by these features, and, because of its success, allowed the city of Rome to grow to a population that far outstripped what the local food supply would have allowed.

What did the system look like from the top down? As the Roman Empire expanded, it was able to draw upon the surplus resources from the territories it conquered. Some of these resources were extracted through taxes paid in kind (goods in lieu of cash), and for a long time it was believed that this was the dominant form of tax levy. But some taxes must have been paid in cash (gold and 9 silver), and this helped monetise and integrate the Roman economy. This is because additional surplus was extracted through private trade, which was fuelled in good part by the wealth of the provinces themselves. Thus, at least some of the taxes paid to the central treasury returned to the provinces to pay for goods needed to sustain the centre. In fact, recognition of the scale of trade has led recent scholarship to argue that the monetisation of the Roman world must have been higher than previously thought in order to sustain this circular pattern. The existence of goods (particularly surplus staple agriculture like olive oil, garum, wheat and wine) in peripheral areas combined with money concentration in the centre must have served to create a market economy through which goods and cash flowed freely.

John R. Clarke, Art in the lives of ordinary Romans: visual representation and non-elite viewers in Italy, 100 B.C. - A.D. 315 (University of California Press, 2003), pp. 127-28. For this and what follows, I draw from Keith Hopkins, Taxes and Trade in the Roman Empire (200 B.C. - A.D. 400), in The Journal of Roman Studies, Vol. 70 (1980), pp. 101-125.


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The combination of state consumption and a shift from taxation in kind to monetary payments spawned the development of markets, increasing division of labour and growth in the Roman world. Subjects ! had to earn back in the market [the] money [they needed] to defray their taxes which the Roman emperor then spent in other locations. The outcome was an expansion of long-distance trade between tax-exporting and tax-receiving provinces, and 10 growing economic integration. Further, land grants that were given to Roman citizens in the conquered provinces generated wealth and income for the elite, who in turn financed the trade that brought goods from the periphery to the centre. The expansion of the Empire created a circular movement of goods and money, creating in the process some kind of free market system that facilitated trade. In sum, the overall pattern of trade was weighted in the direction of Rome. Even though other cities, such as Alexandria, Carthage or Antioch (located in modern Turkey), were certainly large enough to require serious surplus resources to survive, it was the privileged citizenry of Rome that 11 soaked up a significant amount of the available resources. This was a pattern that intensified as the Empire expanded and was thus able to acquire more capital to fuel trade. It is worth noting here th that archaeological and other evidence suggests it was not until the later Empire (4 century) that 12 peripheral regions (e.g. Britain, Libya, Syria) started to show signs of expanding prosperity. This is interesting for several reasons, but for now, Ill simply point out that it shows the degree to which the Roman centre absorbed surplus (of both goods and money) at the expense of elsewhere st rd during its heyday (1 - 3 centuries CE). So if the pattern of Roman expansion and control created a surplus of goods in the periphery and a surplus of revenue at the centre, it should not surprise us that over time an extensive and sophisticated market emerged to exploit the potential that this created. What did that market look like? We can start with the farmers in Egypt.


You probably know the names Mark Anthony and Cleopatra. The last rulers of the Ptolemaic Kingdom in Egypt, they were defeated by Octavian in 30 BCE, at which point Egypt became a Roman province. Under Roman rule, Egypt was largely peaceful and prosperous. While the city of Rome had originally depended upon supply from the nearby island of Sicily during the period of the Republic to supplement local sources of grain, as the population expanded under the Principate Sicilian supply was no longer adequate. Egypt, along with the province of Africa (Tunisia), became the breadbasket of the Roman world. (see figure 6). This was because of the high yields that were supported by the Nile flood valley. Egyptian farmers had for millennia enjoyed the singular properties of the Nile to grow relatively large quantities of food this had helped create the remarkable Pharaonic civilization that we can still see today in the Great Pyramids and Temples up and down the Nile. Because the river flooded regularly, the soil was constantly replenished, acting 13 as a natural fertiliser. Although Egypt is very dry (although, as I noted above, it had more rainfall during this period), predictable seasonal variations in river height meant that farmers on the banks of the Nile could easily irrigate their crops using a technique known as basin irrigation. Furthermore, the Nile serves as an excellent transportation network: the river flows from the south, while the prevailing winds blow from the north. Thus, boats can easily move up and down the river simply by raising or lowering their sails. And at the mouth of the Nile delta stood the city of




Peter F. Bang, Trade and Empire In Search of Organizing Concepts for the Roman Economy, in Past & Present, Vol. 195, no. 1 (2007), pp. 3-54, at p. 6. Alexandrias population has been estimated at c. 500,000 and Antiochs at 400,000 during this period. These are, however, very approximate. Peter Garnsey and C. R. Whittaker, Trade, Industry and the Urban Economy, in The Cambridge Ancient History, xiii, The Late Empire, AD 337425, eds. Averil Cameron and Peter Garnsey, 2nd edn. (Cambridge, 1998). Elsewhere, the only fertiliser available was manure (including human waste!), which was in high demand and short supply. As a result, most Roman farmers were forced to use fallowing (although there are a few areas where crop rotation seemed to have been regularly employed). See K. D. White, Roman Farming: aspects of Greek and Roman life (Cornell University Press, 1970), 157-58.


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Alexandria, a great centre of learning and commerce both, and ideally situated as a port from which to move goods around the Mediterranean.


The scale of goods that moved up and down the Nile must have been very significant indeed and the roads of Egypt must have been clogged with traffic, moving supplies from the farms to the banks of the Nile, and, again from the river boats to Alexandrias port warehouses. Thus, the combination of an ideal climate, regularly fertilised soil, abundant irrigation, a built-in river highway and an ideally-located port meant that Egypt could produce and easily deliver an abundance of grain for the wider Roman world. If Egypt was a primary source for surplus wheat to feed Rome, it was not the only source: other supplies came from North Africa and to a lesser extent elsewhere across the Mediterranean world. Thus, once the Roman world had expanded outside of the Italian peninsula, it was able to profit from an agricultural abundance that far exceeded what could be found closer to home. This in turn promoted a vigorous trade to take advantage of that available surplus and a complex market system developed to manage that trade. In other words, this was globalization, Roman-style.


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How did the grain get into the hands of our industrious dockside workers at the deepwater port at Ostia from the fields of Egypt and other provinces? The simple answer is a network of private merchants who, over the course of centuries, found a profitable business importing thousands of millions of tons of grain to the city of Rome. But behind that simple observation lurk many complexities intrinsic to doing business in the Roman environment. How did these merchants finance their activities? How did they structure their companies? And, perhaps most interestingly, how did they adapt to a world of limited (what economists call asymmetric) information? Sadly, no grain merchant ever bothered to pen (or not that we know of) a tell-all book detailing the intricacies of the trade. There are, however, a variety of indirect sources which can help us shed light on all of these questions.14 First, finance of the grain trade must have come largely from those who had disposable wealth which in Rome was a small, powerful elite divided into several social classes. At the top were the mega-rich: Roman senators, men (only) drawn from the leading families of Rome, whose vast estates generated enormous incomes. Below them, but sometimes as rich, were the equites or Knights, originally wealthy families that could afford to provide cavalry for the Roman army, but later a designation extended to the wealthy elites, often in the cities. For both senators and knights, trade was a disreputable business and so despite the fact that these voices dominate what we know about the civilization of the Roman world, there are only a few scattered references (or better said, admissions) of involvement in the finance of Roman trade. We might consider them to be the silent partners of Roman commerce, fronting the cash and reaping the profits, but generally silent about their role. The last category of merchants was freedmen, who can justifiably be said to have been the glue of 15 the Roman economy. Given this important role, it may surprise you to learn that freedmen (as the name implies) were people who were either descended from or else themselves had once been slaves. Normally when we think of slaves, we think of people miserably confined to a life of servitude without remuneration. That was certainly true for many slaves in the Roman world. But it is also true that across the Roman world, many slaves regularly migrated into free status, either by dint of their own hard work, or else because they were freed (the technical term is manumitted) by their owner. Thus, many of Rome's most successful merchants were from slave families who, upon 16 gaining their freedom, turned to trade. The importance of this shall become clear in a moment. So in general (and it is a generalization), the grain trade was carried out by merchants drawn from freedmen or knights, who were financed by the knightly and senatorial classes (even if the were loth to admit it). What was being financed? It is helpful, and not that anachronistic, to think of these operations called societas much like modern corporations. Silent partners provided the capital and acted much like important shareholders. The companies themselves existed legally, signed contracts, maintained accounts, paid dividends (profit distribution). And although most such companies depended on inter-personal networks, there are several recorded instances of these entities existing beyond the lifetime of the original stakeholders. In brief, the companies were responsible for the arrangement of delivery of grain, which meant they either owned or subcontracted ships, they had accountants, they employed (directly or indirectly) workers at both ends of the supply chain, and they may had a physical infrastructure. Of these elements, the actual ships were the most important. In general, a large corporation might have been responsible for more than fifty such ships, some of which were very large indeed. Evidence for the size of a Roman grain ship comes from various sources, including visual evidence, the bible (St. Paul traveled to Rome aboard a grain ship) and other literary works. But we also have
14 15


For what follows, see generally Erdkamp (2005), esp. 206-57 and Rickman (1980). Frank William Walbank, " Trade and Industry under the Later Roman Empire in the West," in Trade and Industry in the Middle Ages, eds. M. M. Postan, Edward Miller and Cynthia Postan (Cambridge University Press, 1987), p. 75. J. Andreau, "Commerce and finance," in The High Empire, A.D. 70192, eds. Alan K. Bowman, Peter Garnsey and Dominic Rathbone (Cambridge University Press, 2000), pp. 780-81.


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numerous shipwrecks, which sit in watery silence, attesting both to the vigour of Roman commerce as well as the technical details of the logistical infrastructure. We know from these wrecks that there were specially designed grain ships, vessels with hulls specifically optimized to carry grain. There also survive government decrees, which lay out various financial incentives for ship-owners to build (or perhaps retrofit) their ships to carry grain for Rome. As now, the government used a form of tax credit to promote certain kinds of trade that were considered to be of vital interest to the state. The grain corporations, or else their subcontractors (suppliers) clearly took advantage of these incentives. The Roman grain corporations also employed a network of agents: local buyers, logistical staff, and overseers. Some had satellite offices across the Mediterranean to manage the company's local affairs and take advantage of local knowledge. While we lack detailed information about the organizational nature of these operations, we can reasonably surmise that they were structured to optimize the profit potential that existed in supplying grain to the city of Rome. Finally, individual grain merchants banded together to form what looks much like a modern-day trade association. These groups were called collegia and while their exact origins are obscure, they served to represent the interests of the grain merchants, especially in its dealings with the state. In part, they acted monopolistically, by limiting the ability of other agents to intervene in the free market through the establishment of exclusionary conditions for merchants seeking to join the trade. But they also advanced the collective interests of the grain merchants by creating an environment for the exchange of information and expertise, for instance, or the creation of finance pools. We can presume that much of the structural and organizational (or cross-organisational) behaviour of the grain merchants was driven by one central concern that we might think no longer has much relevance: the problem of information. This issue is worth considering in greater detail, since one of, indeed perhaps the most extraordinary accomplishment of the system that emerged in the context of the Roman market was its ability to trade goods efficiently and in large quantity despite persistently limited information.

INFORMATIONAL UNCERTAINTY AND THE ROMAN MARKET In the absence of modern communications technology (e.g. the telegraph), the information available to market agents was naturally highly constrained. It is true that under Augustus, in response to military and administrative needs, a kind of courier service (cursus publicus) was established that extended over much of the Empire. This was, however, expensive to use, largely confined to official state use and, most importantly, was limited to the speed of a horse travelling over the Roman road system.17 This meant that in practical terms, market information existed exclusively in a local context. Roman grain merchants, therefore, contended with the consequences of highly limited information, which by definition creates deep structural issues in the functioning of a market. At a very basic level, we would expect that a market that is characterised by limited, uncertain and asymmetric information is generally undercapitalised and subject to systemic inefficiencies since it requires specialised intermediaries along the transaction chain.18 Informational uncertainties also sorely limit a firms ability to intervene successfully in the market beyond the immediate informational environment within which it can obtain knowledge (about pricing, demand, etc!). Yet the nature of the Roman firm that emerged to handle the grain trade went well beyond the limited organisational structure of a specialised intermediary. The level of firm capitalisation, the use of far-flung agents, and the contracting of services within the firm all suggested that Roman


Anne Kolb, "The cursus publicus" in eds. Colin Adams and Ray Laurence, Travel and geography in the Roman Empire (Routledge, 2012), pp. 95-105. See, for instance, Alfred Chandlers description of commerce in the pre-Industrial United States, The Visible Hand: the Managerial Revolution in American Business (Harvard, 1977), pp. 15-49.


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firms had some kind of a hierarchal structure in place in order to manage operations. The fundamental problems that face any hierarchical organisation the so-called principal agent problem must have especially severe, then, in the Roman context of highly limited information and very slow information flow. Not only were the merchants themselves representatives of capital, but there were large barriers of distance and time between merchants and their agents, making the coordination of buying and selling difficult to manage. Merchants could not ascertain quickly when the price of grain in Egypt, Africa, or Rome might be high or low, or even if their ship had sunk in a 19 storm. In this environment, the potential for adverse selection and moral hazard must have been especially severe. And yet it is clear that, despite seemingly intractable problems that would suggest highly sub-optimal market conditions to the point of market failure, the Roman system was able to develop ways to use the market efficiently. Now, in the context of this structurally asymmetric informational environment, we should remember several key points. First, Roman traders could sign binding legal agreements which created enforceable contractual terms and conditions. Second, the system of quality control and weights and measures verification introduced supervision at critical points in the supply chain, controlled by workers who belonged to a guild (or cartel). Third, grain merchants, by banding together, were able to obtain measures of assistance and support from the state that protected them, to a degree at least, from elements (like bad weather, shipwrecks) that were outside of their control. Fourth, for the entire process there was (if you will pardon the anachronism) a paper trail in the form of receipts that were exchanged across the process. A shipper's receipt survives from ca. A.D. 21112 which gives an idea of how the exchange was controlled.
Given to Didymus by Posidonius, master of eight boats carrying 40,000 artabae in the Neaspoleos administration, I have received and had measured out to me the amount ordered by you, in accordance with the order of his excellency the procurator Neaspoleos, from public granaries of the said village at the river Tomis (a specified amount of) wheat, produce of the year (specified), unadulterated, with no admixture of earth or barley, untrodden and sifted, which I will carry to Alexandria and deliver to the officials of the administration safely, free of all risk, and damage by ship. This receipt is valid, there being three copies of it, of 21 which I have issued two to you.

Few such contracts survive. Those we do have, however, are written using this kind of legal boilerplate, suggesting just how commonplace they must have been; millions of such receipts would likely have been exchanged during the Republican and Principate periods. By carefully delineating the origin, amount and condition of the corn, the terms of shipping, and those responsible, such contracts presumably offered an important measure of security against fraud. Such contractual stipulations created some protection for merchants operating in a world of limited information. But these controls all exist at the boundary of the firm and the market they govern, in other words, external transactions between the firm and the market. How did the Romans, though, control for the kinds of internal problems that structurally asymmetrical information would typically create internally within the firm? In the absence of meaningful informational exchange, the Roman grain trade relied on trust. Because there was no way to pass information down the chain expeditiously, merchants had to rely on the judgments of their appointed agents who were in place. In an environment where fundamental issues like quantity, quality and price were all fluid and could change at the point of delivery, merchants located in Rome had to rely on a network of trust that existed within the organisations.




David Kessler and Peter Temin, The organization of the grain trade in the early Roman Empire, in Economic History Review, 60, 2 (2007), p. 319. A widely used unit of measurement for corn in Egypt, probably equivalent to 4,5 modii, or in metric terms, about 39 litres. R. P. Duncan-Jones,The Choenix, the Artaba and the Modius, in Zeitschrift fr Papyrologie und Epigraphik, Bd. 3 3 21, (1976), p. 44. So, the contracted total cargo was roughly 1.500 m , or 195 m per boat, which would mean a hold capacity per boat of, e.g., 15m x 4m x 3.25 m. Rickman (1980), 265.


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I noted above the importance of freedmen to Romes trading regime. This was because a manumitted slave typically had deep loyalties to the family from which he had received his freedom. The act of freeing a slave often brought the newly freed individual into the network of the family, extending to him the benefits of that network. In other words, for the wealthiest classes (those who largely financed Roman trade and who dominated slave-ownership) the owner-slave relationship was critical to the successful establishment of spheres of implied trust that could be relied upon to act in the best interests of the stakeholder given the available information. Since the information available to someone in situ would always be better than that derived from a standing directive delivered earlier by a distant agent, the mechanism for getting around the limits of information exchange was thus built out of the ability to rely on this fundamental assumption that responsible individuals who intervened at various points in the supply would always act in the best interests of the organisation via a shared reputation mechanism. The Romans thus used reputation, built from tight social networks, to guard against moral hazard.22


So far we have considered the nature of the market, the role of individual agents in supply and delivery, the structure and organization of the grain enterprises, the ways in which trade was financed and the mechanisms that controlled against moral hazard. Finally, lets consider the role of the state. The state had two focal points that determined its interest and involvement in the grain trade: the army and the metropolis of Rome. The importance of ensuring supply to both army and city was such that it created compelling state interest and thus produced a number of interesting developments. For our purposes, I shall leave aside consideration of the supply logistics for the army and concentrate on the measures the state took to deal with the case of Rome, although in the case of incentivising supply, this separation is admittedly artificial. Additionally, I want to stress that when we talk of the Roman state during this period, we are referring to a political entity which was dominated by that small, powerful elite I discussed above. These were the men (and very occasionally women) who came from the leading families and who in general controlled central, regional and city administrations. So although I will talk of state interest, it should be clear that these were largely inseparable from the interests of the Roman elite. It is useful to consider state intervention in the grain trade from three angles: investment, incentivisation, and distribution. We have already seen our dockside workers at Romes main port, located at Ostia at the mouth of the Tiber. Although Republican Rome had been served by this port facility, it was extensively rebuilt under the Emperor Claudius to accommodate more traffic, bigger 23 ships and increase the dockside storage capacity. This was a massive undertaking, turning what had been a relatively modest port into a large deep-water port that could move large amounts of cargo efficiently (see figure 7)



Kessler and Temin (2007). On the reputation mechanism, see the classic treatment by Avner Greif, "Reputation and coalitions in medieval trade: evidence on the Maghribi traders," Journal of economic history 49.4 (1989): 857-882. G. Rickman, Roman granaries and store buildings, Cambridge University Press, 1971, pp. 2-5.


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Much of the impetus to expand the port at Ostia came from the expanding grain trade, the scale of which had overwhelmed the existing facilities leading to serious bottlenecks and clogging local roads with freight traffic. We have already observed that grain needs special storage conditions in order not to spoil, and a large section of the warehouses that were built at Ostia were speciallydesigned to house grain by providing adequate ventilation and controlling humidity. State investment to construct and maintain large-scale facilities to manage the grain trade was, during this period, clearly considerable. In addition to investing in the necessary infrastructure, the state also incentivised the grain trade. Through various decrees, the government promoted the construction of larger ships, by granting, for instance, special tax privileges. The state also recognized the status of grain merchants, who, as I noted above, protected their collective interest by banding together into collegia, or associations. Such professional merchant guilds were, in fact, quite rare, most likely because 24 merchant interests were usually too diverse to be represented coherently by such an association. Grain merchants, however, were different. We have evidence attesting to the formation of numerous such groups. A collegium served as the interface between the merchants and state. It helped secure from the state an exclusive right to trade grain, according themselves an essential

W. V. Harris, "Trade," in The High Empire, A.D. 70192, eds. Alan K. Bowman, Peter Garnsey and Dominic Rathbone (Cambridge University Press, 2007), p. 35.


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monopoly. Additionally, the state offered various kinds of guarantees, notably price guarantees that helped to limit trading risk. In effect, the state enacted policies designed to guarantee supply by working with and incentivising a limited group of merchants. By promoting the construction of larger ships, the state also played a role in deferring the upfront capital costs that were needed in 25 order to respond to the citys and the armys need for growing supply. Finally, the Roman government was the single largest purchaser of grain. The free distribution of grain, called the annona, or the grain dole, was a central feature of Roman city life. Although the numbers of recipients of subsidized wheat from the state granaries is unknown, it may have approached as much as 30-40% of the citys population. You may know the Roman satirist Juvenals famous dismissal of the Roman mob as a wanting nothing more than panem et circenses or bread and circuses. This idea, along with free entertainment, referred to the state food subsidy upon which Roman urban life depended. The description of a once-ambitious people made soft through handouts may hold an enduring appeal, but the reality was that Romes population was so large that without an organized system of price controls and distribution, urban chaos would have resulted. Indeed, the state policy of the grain dole originated as a way of appeasing unhappy and hungry residents in times of price spikes. By the Imperial period, there were almost 300 public bakeries in the city. Given the importance of state subsidies for bread, it will come as no surprise that the bureaucracy that grew up around the management of the grain dole was one of the citys earliest (dating back to the fifth century BCE). By the Principate, the top job (the praefectus annonae the job held by Senecas friend) was a powerful political position, rivalling the chief titles from the Republican tradition, such as the Aedile. This was in large measure because political fortunes were made in Rome, and politicians had to pay deference to the vox populi, the popular will. Since food shortages and spiking prices were surefire ways to invite riots, the supervisor of the grain dole had a critical function in the stability of the body politic, supervising the purchase, storage, distribution and, importantly, price controls. Despite the idea that this was a sop to an unruly mob, the annona extended to the earliest expansion of the Republic and had grown in importance and complexity alongside the state itself. The grain dole, in other words, was not a privilege, but rather a right of 26 Roman citizenship. Although it has been pointed out that the scale of private trade was larger than that paid for by the public purse and destined for state granaries, the fact that the state was by far the single biggest player means that it surely had a disproportionate effect on the market environment. State actions like subsidising larger ships, granting monopoly guarantees, providing portside facilities, and setting prices must have played a dominant role in determining the disposition of the market as a whole. Grain was too essential a commodity to be left entirely to free market forces.


I wish to conclude this survey of the Roman grain trade with a few brief points. First, the system political, economic, social that allowed the large scale exploitation of surplus agriculture, bringing grain from African fields to Roman granaries, ended rather abruptly in the third century (ca. 250). Although details are scarce, we know from other sources that the food supply to Rome was 27 severely disrupted and collapsed within a very short period (perhaps under a year). Second, once the city of Rome ceased to be the main consumer of available surplus, other parts of the Empire started to expand. Thus, the so-called crisis of the Third Century that afflicted the Roman Empire, while disastrous for Rome itself, proved a boon for other, previously peripheral urban centres. While we have much less information about the grain trade after the collapse of the Roman market, it is plausible that existing mechanisms, including physical things like ships but also
25 26 27

In addition to Rickman (1980), see also Garnsey and Whittaker (1998), pp. 319-21. Riots: H. P. Kohns, Versorgungskrisen und Hungerrevolten im sptantiken Rom (Bonn, 1961). The fifty years from Severus Alexander to Diocletian are shadowy and obscure. Walbank (1987), p. 93.


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intangibles like knowledge and expertise, simply shifted to different markets. Although the heyday of Rome was during the first and second century CE, that of other cities (for example, those in the Iberian peninsula) was later in the fourth and fifth centuries. That prosperity must have, to a 28 degree at least, been sustained by expanded access to surplus agriculture, and especially grain. Finally, there is, I think, a fundamental question that emerges from this complex system. We have seen that the scale of trade permitted Rome to expand to a size that eclipsed any other urban centre at the time; indeed, allowed Rome to grow to a size unrivalled until the nineteenth century. Was Romes experience simply an anomaly? But if it was anomalous, how did it manage to last for hundreds of years, despite the pitfalls of limited information and pre-modern transportation? But if it wasnt anomalous, how can we explain the sudden collapse of Rome and her trading infrastructure? In other words: how can we make sense of this extraordinary moment in terms of the overall sustainability of the system that emerged out of the opportunities that the Roman Empire itself created? " " "


E.g. Carthage in North Africa, which reached its apogee in the 4 century. Bryan Ward-Perkins, Specialized production and exchange, in East and West: Economy and Society. Late Antiquity: Empire and Successors, A.D. 425600, eds. Averil Cameron, Bryan Ward-Perkins and Michael Whitby ( Cambridge University Press, 2000), p. 357. More generally, Lukas de Blois, "The crisis of the third century AD in the Roman empire: a modern myth?." In L. de Blois & J. Rich, eds. The transformation of economic life under the Roman Empire: proceedings of the Second Workshop of the International Network Impact of Empire, (Gieben, 2002), pp. 204-217.