W. V. Harris - The monetary systems of the Greeks and Romans

Introduction

For decades the history of money in the classical world was a fairly quiet field. It was almost universally supposed to be synonymous with the study of numismatics, and the most debated questions concerned coinage—why it came into being in the first place, when it spread to the various regions, when and by how much it was debased, whether it was possible to calculate the quantity of it that was produced or in circulation in this period or that.

One might be tempted to say that what has shaken up the study of Greek and Roman money since the beginning of the 1990s has been the intrusion of non-numismatists, in particular of scholars with wider interests in economic or cultural history. But what has happened has been more complicated than that. In the first place, the labels are reductive, and some of those scholars who have ample experience as numismatists would undoubtedly define themselves as ancient historians. And some of those who have widened the debate during these years, Christopher Howgego for instance, have been numismatists de métier.

It is clearly true, however, that important new work on various historical problems—in particular on the possibility of sustained economic growth 1 in the ancient world 2 and on inflation in the later Roman Empire—have attracted the attention of a larger circle of historians. And in the same period, a certain revival of the interest of economists in economic history, which was at one time in definite retreat in a number of countries, has included a degree of inquisitiveness about relatively sophisticated pre-modern economies, including that of the Roman Empire (Marcello de Cecco led the way). This is all the more welcome, since there are still ancient historians who are loyal to the notion that because ancient economies were different from ours they can study antiquity in isolation.

Economists are also at risk. A recent and well-regarded work entitled The Nature of Money takes a historical view of the subject, stretching back to classical times. Good. It is also a work of exceptional lucidity. But the author’s first paragraph on the Romans contains four serious errors, 3 and so it goes on. It is not all his fault, perhaps—Roman history has its share of technicalities and obscure terminology. The author himself laments ‘the division of intellectual labour’ that has affected the study of money. 4 The answer is, I suppose, more dialogue.

The contributors to this volume—a cross-section, it may be said, of those who interest themselves in Greek and Roman money 5—were given a free hand to write about the topics of their choice. My sole suggestion was that they might tell us whether, once coinage had been introduced in the Greek and Roman worlds and had become a common means of exchange, there was also non-coinage money, and if so whether it mattered much.

Not that the editor can lay claim to neutrality. The reader will see that some of the contributors are firmly of the opinion that an understanding of the ancient economy absolutely requires classicists to emerge from their cocoons and pay attention to both economic theory and the economic history of other eras, and that is my opinion. Others disagree.

My colleagues made use of their freedom, and the various topics they covered, some of them familiar, others much less so, may be broken down as follows (I do not, be it noted, describe their conclusions except in a most telegraphic fashion—each chapter speaks for itself).

1. THE USE OF BULLION AS MONEY

Kroll (Ch.1) seeks to establish that the inhabitants of a number of Greek cities in Asia and in Magna Graecia, and the Athenians too, used bullion as money both before the introduction of coinage and even afterwards. There can be no doubt that precious metals served as stores of value, but Kroll goes further, referring to bullion as a ‘transactional medium’. On the Roman side, I argue (Ch. 9) that bullion was very seldom used for making payments during high classical times, except in emergencies and across the borders of the Roman Empire. 6 Andreau (Ch. 10) shows in meticulous detail that the first part of this statement was very probably true of the first-century cities next to Vesuvius.

2. REASONS FOR THE SPREAD OF COINAGE

The reason or reasons why the Lydians invented coinage and the archaic Greeks enthusiastically adopted the invention (to facilitate payments by or to the state? to facilitate exchange?) have been canvassed almost to the point of exhaustion. 7 Kroll (Ch. 1) favours what we may call the Holloway–Wallace solution, 8 based on the variable quantities of gold and silver to be found in natural deposits of electrum, and the consequent usefulness to the Lydians and Ionians of guaranteeing the value of payments made by means of pieces of electrum—which leaves the enthusiasm of the Greeks outside Ionia unaccounted for. The evidentiary basis for the discussion has changed somewhat in recent times, with the realization that the earliest Greek coinage included a large quantity of minute silver coins (down to a range around 0.21 g.), 9 but it may be more profitable now to consider other regions and periods.

Hellenistic Egypt, because of the relative abundance of the evidence, is an instructive case of state initiative: Manning (Ch. 5) argues that the Ptolemaic government’s intention, when it vastly increased the quantity of coinage in circulation, was to facilitate taxation and payments into the state banks.

3. CREDIT-MONEY

It has been one of the main arguments of Finley and his followers against the possibility of economic growth in antiquity that an economy in which the money supply was effectively limited by the state’s supply of coinable metals and in particular of gold and silver was thereby, in most periods, prevented from growing. 10 We might in fact put this question the other way round: would it not argue for a remarkable lack of both ingenuity and mutual trust if the well-to-do in, say, fourth-century Athens, in the larger Hellenistic cities, and in Late Republican Rome had not devised some form of credit-money? Schaps (Ch. 2), concentrating on the Greeks, reduces the phenomenon as much as he is able to. While he (interestingly) admits that Greek credit-money in fact existed, he contends that there was little of it, or at least it was ‘on a scale much more modest than that known to us’ [sc. now] (a formulation with which we might all agree).

The opposing case is mainly in the hands of Cohen (Ch. 4) for Athens, and in mine for Rome (Ch. 9). Fourth-century Athens was full of lending and borrowing, including a perhaps surprising amount of financing provided by sellers large and small. Bank lending too was ‘extensive and varied’, and Cohen explains succinctly— essential reading, in my view, for all who are interested in ancient money—how such lending added to Athens’ money supply. As for my chapter, its most original aspect is that I attempt to define the conditions in which Roman credit can properly be looked upon as money (for not all of it was money).

4. MONEY SUPPLY

Closely related to the previous problem is the question of the elasticity of the money supply. Cohen’s arguments are intended to show that the money supply of Athens in the fourth century BC ‘was in fact strikingly elastic’, since it was ‘substantially’ increased both through credit provided by merchants and through non-coinage money created by bankers. From the first century BC if not earlier, the same applied (so I claim) to the Roman Mediterranean. Some scholars have even hazarded estimates of the volume of credit-money that the Roman economy created; to my mind, however, the most important question here is not the sheer volume of credit-money but the availability of capital (see Ch. 9).

5. PRICES AND GROWTH

And closely related to the question of money supply is the matter of economic growth in the Roman Empire. Hollander (Ch. 6) tries a new approach, via people’s propensity to keep their assets in coin, which he thinks increased in the unstable conditions of the Late Republic. Using the work of A. C. Pigou, he shows how this factor was related to prices, to the money supply, and to the total output of the economy. We cannot, of course, give secure values to any of these factors, but Hollander’s model has at least the advantage of offering for the first time a reasonably plausible explanation of why the probably quite rapid increase in the money supply in the Late Republic was not accompanied by rapid inflation. The difficulty in the argument, in my opinion (see again Ch. 9), is that if we are going to apply the concept ‘money supply’ to the Roman world, we must take into account the ample supply of credit-money.

6. MONEY, ATHENIAN TRAGEDY, AND TYRANTS

The monetization of a community’s economy is always likely to have had effects far beyond the economy itself. No one has shown this more vividly than Richard Seaford, above all in his book Money and the Early Greek Mind. The contribution he offers here (Ch.3) will seem tangential to some, while to others it will well exemplify the way we ought to write the cultural history of money. Seaford suggested earlier that monetization was a ‘crucial factor in the genesis and in the preoccupations’ of Athenian tragedy. This paper connects the monetization of Athens both to the development of festivals under the tyrants and to the form and content of tragedy. The isolation of the tragic tyrant, according to this view, expresses the ‘autonomous power conferred by money on the individual who possesses it’.

7. THE EXTENT OF MONETIZATION

This is a venerable problem but still an essential one. 11 Andreau (Ch. 10) confirms how thoroughly early imperial Italy was monetized. But it is Egypt, with its rich documentation, that is self-evidently the place where the matter can be put to the most thorough tests. For the Hellenistic period, Manning (Ch. 5) concludes that while monetization spread to some of the Egyptian population, it was quite variable according to social class and according to location. For the Roman period, van Minnen (Ch. 11) argues for an increasing monetization of the agrarian economy between the first and the third centuries ad, followed by a ‘significant reduction’ in monetization after the inflation of 275, with a gradual re-monetization of the agrarian economy asserting itself from the fourth century onwards after the introduction of the solidus.

But it is Katsari (Ch. 12) who takes on the most difficult aspect of this problem, the monetization of the frontier provinces. Can we trust the numismatic evidence? What it seems to show, according to Katsari’s rather minute analysis of the finds in the Balkans and in Asia Minor and Syria, is that the monetization of these parts of the Roman Empire depended mainly on levels of urbanization and on the extent of trading activities, while the role of the army, though not negligible, was indirect (urbanization was itself partly a result of the presence of the military).

8. UNIFIED MONETARY INTEGRATION ACROSS THE ROMAN MEDITERRANEAN

The ‘integration’ of the ancient economy or economies is hard to define and harder still to measure. 12 The question, as Kessler and Temin rightly say (Ch. 7), is not a simple ‘either or’, whether the Roman Empire was a single monetary area and an efficient market or was entirely made up of separate local markets. The question is whether the Roman economy was closer to one end of the spectrum or the other. Well, let us find out. Kessler and Temin argue resolutely that there was market integration across the whole Mediterranean in the Late Republic and early Empire, basing their case on a reexamination of known wheat prices. These prices are terribly few, but they seem to reveal that wheat cost less the greater the distance from Rome, which may reasonably be seen as the great centre of demand. Regression analysis shows that it is highly unlikely that this pattern is due to chance. Such a pattern was much favoured by the fact that the Roman Mediterranean was in effect a single currency zone. 13

9. THE CHOICE OF METALS: GOLD, SILVER, OR BRONZE?

The decisions of ancient states to use this metal or that for their coinage, and the economic consequences of these decisions, are often problematic. Scheidel (Ch. 13), in a chapter of extraordinary range, sets out to explain the contrast between the ‘Aegean’ model of coinage (in which precious-metal coinage is dominant), a model which was to spread throughout the ancient world and ultimately over most of the globe, and the traditional Chinese model (in which base metals dominated the coinage system). This involves weighing against each other the sheer availability of metal resources, the diVerent kinds of military service that characterized the ancient Mediterranean and ancient China, political considerations, and finally path dependence 14 (aka mindless conservatism).

Early Rome used bronze money, then around 300 bc added silver coins—it is not altogether clear why, especially as Rome at that point controlled no silver mines. Some 250 years later, under Caesar, the Roman state began the systematic manufacture of gold coinage too— and again it is not entirely clear why it happened at this exact time (the state had long had access to suYcient gold). (In both cases, prestige is, of course, the obvious answer.) What we might expect to be clearer is what the inhabitants of the Roman Empire actually did with their gold coinage. Lo Cascio (Ch. 8) shows that the answer is quite complex. Making use of Duncan-Jones’s demonstration that gold coins show markedly less weight loss than silver coins, 15 he concludes that the former were often used as a slowly circulating store of value. But he also argues, primarily on the basis of the literary evidence, Apuleius especially, that gold coins were widely used to make actual payments. 16 He then reconstructs the story of how the third-century monetary system collapsed, to be succeeded by the new system founded on the regular use of the gold solidus and its fractions.

Andreau (Ch. 10) performs the invaluable service of bringing together and analysing the evidence as to how these two kinds of coins were used in the Vesuvian cities, having Wrst pointed out the various traps that await the incautious user of this evidence. His style is to avoid both hypothetical statistics and sweeping claims. Instead he proceeds as much as possible house-by-house, a technique that is now becoming more and more practicable; and he compares the evidence from the Vesuvian cities with the evidence from othersites. The result, as Andreau says, is somewhat negative. On the one hand, we may say that Pompeii and Herculaneum could scarcely have been more thoroughly monetized; on the other hand, some scholars will undoubtedly Wnd it puzzling that rich houses have not yielded greater quantities of coins.

10. MONEY HISTORICIZED IN A ROMAN PROVINCE

Finally, van Minnen (Ch. 11), oVers the most diachronic analysis in the whole book, Wtting together the development of monetization, price changes, investment, and taxation in Roman Egypt from the Wrst century to the sixth (thus, together with Lo Cascio, he provides this volume’s contribution to the study of the late-antique economy). He also manages to consider how various changes aVected diVerent kinds of people, in particular big landowners, farmer owners, tenants, and ordinary town-dwellers. This is the kind of analysis, conceptually sophisticated but diachronic and human, that we wish we could carry out for the Roman Empire in general, and indeed a great deal of it is instructive for the world outside Egypt. It is good to be reminded that monetary history includes real eVects: ‘after 275, they [the ordinary inhabitants of the cities in Roman Egypt] died in large numbers’.

What else might we proWtably have discussed? Every reader will have views. Further Hellenistic chapters would certainly have helped. But I will merely mention one issue, a matter—as it seems to me—of considerable importance and difficulty.

That issue is fiduciarity. The subject of fiduciary coinage appears from time to time in this volume (Schaps, Cohen, Harris), but is not dealt with systematically. No one, I think, would any longer agree with Finley’s claim that ancient states ‘never created fiduciary money in any form’. 17 The fullest discussion known to me is Seaford’s, 18 which shows that in a certain sense Greeks produced fiduciary coinage from the very beginning. But one of the problems is definition. Clearly there is a big difference between coinage that has been slightly debased but is assumed by most of its users to be made of a particular precious metal and coinage that has a conventional value, its users not caring at all what its bullion value might be. And how can a historian detect fiduciary coinage in any case? I suspect that most Roman silver coinage was fiduciary from the time of the Second Punic War crisis until ad 275, but it remains to be seen whether, with our scanty information about the prices of gold and silver, this can be proved. The only price of gold given in Scheidel’s Roman price catalogue 19—Caesar’s plundering in Gaul drove him to offer gold at a lower-than-usual price, 3,000 sesterces a pound, according to Suetonius, DJ 54, a scarcely trustworthy source on such a point 20—might suggest that the fiduciary value of the denarius at that time was negligible. 21

At the end of an interesting chapter entitled ‘Ancient and Modern: The Invention of the Ancient Economy’, Neville Morley expounds a dichotomy between those whom he labels ‘formalists’, who hold that ‘economic principles . . . provide a better understanding of how the economy actually worked than the limited concepts of the historical participants’ and other historians who ‘insist on the primacy of what are sometimes termed the actors’ categories’. To study ancient money, ‘in purely economic terms’, he goes on, ‘may be intellectually convenient, but it completely misses all the other dimensions, all the other meanings . . . most of which were far more important [sic] to the ancients than the purely economic’. 22 This dichotomy is to be rejected, for, as I hope that this book shows, we simply do not have to choose between economic analysis and understanding the mentalities of the Greeks and Romans. Read the chapters in this book that make most use of modern economics: their authors are at least as attentive to the concepts and behavioural patterns of the ancients as the others. There is no dilemma here. It would be profoundly silly to try to write history without modern concepts, and Morley’s own book is packed with them, quite properly. Of course we always have to be on guard against anachronistic judgements, just like other historians. The real enemies are received ideas and ignorance, in this case ignorance of the history and theory of money.

The purpose of this volume is in any case to stimulate debate about the nature of ancient money in general. Each author puts forward his or her point of view, more or less provocative as the case may be. Best of all, let us admit it, is to convince the informed scholarly public; next best is to elicit well-argued criticism.

Notas

1 For some discussion of the use of this concept in ancient contexts see P. Millett, ‘Productive to Some Purpose? The Problem of Ancient Economic Growth’, in D. Mattingly and J. Salmon (eds.), Economies beyond Agriculture in the Classical World (London, 2001), 17–48.

2 Once for all, I apologize for writing ‘ancient’ in place of ‘Greek and Roman’. There is no intention to minimize the interest of the monetary history of other ancient states in any part of the world.

3 G. Ingham, The Nature of Money (Cambridge, 2004), 101. ‘The Roman economy was driven by the state’s activity.’ ‘There is evidence to suggest that more coins were issued than were needed for immediate purposes, in order to stimulate production and exchange.’ ‘During the first phase of imperial expansion [he seems to mean the Julio-Claudian era, though this was not of course the first phase of imperial expansion], expenditure released far more coins into the provinces … than were collected back in taxation’ [my italics]. He takes from R. W. Goldsmith the claim that ‘all imperial trade ‘‘was conducted entirely on a cash basis’’’; this opinion has admittedly had many supporters. Classicists and others too will be surprised to read that ‘in all Indo-European languages, words for ‘‘debt’’ are synonymous with those for ‘‘sin’’ or ‘‘guilt’’’ (90).

4 Ibid. 9. 

5 This can only, of course, be true in an approximate sense.

6 Thereby contradicting Hollander (Ch. 6), among others.

7 For a brief but up-to-date and illuminating discussion see Seaford, MEG 131–6. In my view, we need further discussion of the kind of ‘government’ that made these minting decisions. S. von Reden seems to be looking in the right direction when she writes that coinage developed ‘in the public political economy of those who held power in the archaic poleis’ (‘Money in the Ancient Economy: A Survey of Recent Research’, Klio 84 (2002), 141–74 at 153).

8 R. R. Holloway, ‘La ricerca attuale sull’origine della moneta’, RIN 80 (1978), 7–14; R. W. Wallace, ‘The Origin of Electrum Coinage’, AJA 91 (1987), 385–97 (the latter develops but differs from the former). Kroll supplies further bibliography.

9 Seaford, MEG 135. For further evidence see J. H. Kagan, ‘Small Change and the Beginning of Coinage at Abdera’, in Agoranomia: Studies in Money and Exchange Presented to John H. Kroll (New York, 2006), 49–60.

10 Finley, AE 196: ‘there can be no doubt that the [money] supply was often inadequate for the ongoing needs of the society, let alone for the prospects of economic growth’.

11 The attentive reader will notice that the contributors use this term in somewhat different senses (see the index); I have not attempted to impose a single definition.

12 Harris, ‘Between Archaic and Modern: Problems in Roman Economic History’, in Harris (ed.), The Inscribed Economy: Production and Distribution in the Roman Empire in the Light of instrumentum domesticum (Ann Arbor, 1993), 11–29 at 18–20. See further C. J. Howgego, ‘Coin Circulation and the Integration of the Roman Economy’, JRA 7 (1994), 5–21 at 9–10.

13 This is at least congruent with the well-known centralization of minting in the high Roman Empire: ‘one or two mints (Rome, and for part of the 1st c. a.d., Lugdunum) provided virtually all the gold coinage . . . a silver coinage which came increasingly to dominate Wrst the west and then the east, and, from early in the Principate, a base metal coinage for the western half of the empire’ (Howgego, 6).

14 For this concept see R. Garud and P. Karnøe (eds.), Path Dependence and Creation (Mahwah, NJ, 2001).

15 MG 191. 

16 I will admit that I read the evidence of Apuleius diVerently.

17 AE 141.

18 MEG 136–46. For other recent comments see A. Bresson, ‘Coinage and Money Supply in the Hellenistic Age’, in Z. H. Archibald, J. K. Davies, and V. Gabrielsen, Making, Moving and Managing: The New World of Ancient Economies, 323–31 BC (Oxford, 2005), 44–72 at 65, and J. H. Kagan, ‘Small Change’ [n. 9], 53–4.

19 <http://www.stanford.edu/
scheidel/NumIntro.htm>, accessed 7 June 2007.

20 Cf. Crawford, RRC 626 n. 1. But the passage favours the notion that, in Hadrian’s time at least, the gold-market was quite well integrated empire-wide (‘per Italiam provinciasque divenderet’).

21 Suetonius’ figure means that Caesar was willing to part with about 322.8 g of gold (see Duncan-Jones, MG 213, for the Roman pound) for about 2,895 g of silver coins (see Crawford, RRC 594 for the weight of the denarius), a gold : silver ratio of 8.97. At a notionally normal ratio of 12 : 1 (ibid. 626) he would have been able to obtain 3,873.6 g of silver coins, about 1,000 denarii. So if such coins were valued at their bullion value, the glut had (supposedly) brought about a discount of almost exactly 25 per cent.

22 N. Morley, Theories, Models and Concepts in Ancient History (London, 2004), 48–9. He does not specify which dimensions and meanings.

Tally sticks

 Palo tallado

Dialogus de Scaccario

La increíble historia de los palos tallados que fueron moneda en Reino Unido hasta el siglo XIX

Medieval foundations of the second coming of democracy

Jørgen Møller & Svend-Erik Skaaning - Democracy and Democratization in Comparative Perspective

June 15, 1215, is an important day in the history of modern democracy. On this day, a number of England’s most powerful barons rallied against King John (aka Lackland) at Runnymede, a short distance to the west of London. Under the threat of rebellion, the barons forced the English king to sign the Magna Carta Liberatum, the Great Charter of Liberties. As the name indicates, the Magna Carta codified a considerable number of liberties together with habeas corpus, the right to have one’s case tried in the court system. 2 The Magna Carta thus served as a set of legal barriers against the arbitrary exercise of power by the king. Above all, it meant that the law placed limits on the power of the ruler. The charter also declared that the free subjects in the Kingdom (above all, the aforementioned barons) had the right of rebellion should the king fail to respect the legal concessions he had made. In return, the barons renewed their oath of loyalty to King John. set of legal barriers against the arbitrary exercise of power by the king. Above all, it meant that the law placed limits on the power of the ruler. The charter also declared that the free subjects in the Kingdom (above all, the aforementioned barons) had the right of rebellion should the king fail to respect the legal concessions he had made. In return, the barons renewed their oath of loyalty to King John.

The Magna Carta was actually in no way unique. Similar charters of liberties were forced upon monarchs in even the remotest corners of Western Christendom over the course of the Middle Ages. 3 The right to resistance has been dated all the way back to the Oaths of Strasbourg in AD 842 (Bloch 1971b [1939]: 451–452), an occasion at which Charles the Bald and Louis the German pledged their allegiance to one another in an alliance against their brother, Emperor Lothar I. The Oaths of Strasbourg are remarkable for including the following point: If one of the kings broke the mutual oath, their soldiers – who had also taken the oath – were bound by duty not to assist their king. This was arguably one of the earliest reflections of the modern conception of popular sovereignty4 which was to prove hugely influential in most of Western Europe in the High Middle Ages.

The importance of the precedent in Strasbourg should not be overstated, however. It was not until the 13th and 14th centuries that actual ‘charters of rights’ began spreading throughout Western Europe. In addition to the Magna Carta (1215), a number of so-called ‘golden bulls’ (aurea bullae) were issued in the 13th century. The most important of these was that of the Hungarian King Andreas II in 1222, which granted privileges to the Hungarian nobility relatively similar to those mentioned in the Magna Carta. The Aragonese Privilege of the Union (Privilegio de la unión) of 1287 and the the statute of Dauphiné of 1341 could also be mentioned as instances (Bloch 1971b [1939]: 451–452). The distinct historical status of the Magna Carta owes to the subsequent significance of the charter for English constitutionalism. On the European continent, the various charters of liberties were annulled or at the very least diluted following the advent of absolutism after the onset of the 16th-century military revolution (Downing 1992; Finer 1997b: 1298–1307). Conversely, the catalog of rights in the Magna Carta proved durable. In fact, the charter remains valid in England and Wales to this day. For example, it provides specific rights to the City of London and the Anglican Church. The Magna Carta thus assumes a prominent position in the traditional English notion of having an ‘ancient constitution’ that guarantees the time-honored Anglo-Saxon liberties (Pocock 1957).

Plutarco (Plut., Luc. 43.3.)

 Gredos 362 - Plutarco - Vidas Paralelas, Tomo V

Estas cosas alejaron aún más a Lúculo de la política. Y cuando Cicerón fue expulsado de la ciudad y Catón fue desterrado a Chipre, se marchó a la par. E incluso antes de su muerte se dice que enfermó su entendimiento y se marchitó poco a poco. Pero Cornelio Nepote 178 dice que no enloqueció Lúculo por la vejez o por una enfermedad, sino a causa de un veneno que uno de sus libertos, Calístenes, le suministró. Pues le dieron drogas para que Calístenes fuera más amado por él, al creer que tenían tal poder, pero le hicieron perder la razón y le eclipsaron el entendimiento, de forma que, estando aún con vida, su hermano se hizo cargo de la administración de sus bienes. Sin embargo, cuando murió 179, como si estuviera en el culmen de su poder militar y político a la hora de su muerte, el pueblo se afligió y acudió en masa. Y el cuerpo fue llevado al foro para obligar a los jóvenes de más alta cuna a enterrarlo en el Campo de Marte, donde Sila había sido sepultado también 180. Pero como nadie hubiera esperado esto, ni fuera sencillo hacer tales preparativos, su hermano, a fuerza de ruegos y plegarias, les persuadió para que permitieran que se le tributaran honores fúnebres en su finca de Túsculo. Pero él mismo no le sobrevivió mucho tiempo, sino que, como en edad y fama lo siguió a poca distancia, en el momento de su muerte también, quedando como un amante hermano 181.

Notas

178 Al parecer, Nepote escribió sobre Lúculo en De uiris illustribus. Han sobrevivido los libros sobre generales extranjeros (como Cimón, cf. supra) junto con biografías como las de Catón el Censor y Atico.

179 Según parece en el invierno del 57-56 a. C., a los 70 años de edad

180 Cf. Plutarco, Sila 38, 6. El sepelio en el Campo de Marte era un honor exclusivo.

181 La relación entre Lúculo y su hermano Marco fue tomada como modelo de amor fraternal en Séneca, Consolación a Polibio XV 1 (Cf. Diálogos. Apocolocintosis. Consolaciones a Marcia, a su madre Helvia y a Polibio. Intr., trad, y notas de J. Mariné. Madrid, Gredos, B. C. G. 220, 1996).

The Gardens of Sallust

Kim J. Hartswick - The Gardens of Sallust. A Changing Landscape (University of Texas Press, 2004) 18-19 

A garden estate was clearly not only a physical manifestation of the owner’s social and political standings, or philosophical leanings but a potential source of his immortality. The domus could publicly advertise the owner’s glory as effectively as or even more effectively than an inscribed name on the architrave of a temple. After one’s death, a grand estate could retain the name of its former owner, just as temples sometimes were referred to after their founders rather than for the divinity to which they were dedicated. 211 In the case of the gardens of Sallust, these seem never to have lost the name of the original owner. Even in the Middle Ages, the district was called “Sallustricum,” and in the sixteenth century, it was known in common parlance as “Salustrico.” 212 Perhaps accounting for the interest in his gardens during these times was the importance of Sallust’s historical writings in the medieval and Renaissance periods. 213

It is not surprising, therefore, that the Roman garden, reflecting one’s life and anticipating the preservation of one’s memory, could serve as the final resting place after death and that monumental tombs on villa properties were characteristic features already by the second century b.c. 214 Such burials, at least in the Republican period, however, did not have to be in suburban gardens. Tombs in the city on private property were an ancient custom reserved for patrician families until imperial times, when this right was reserved for only the emperor and the vestals. 215 Indeed, when Lucullus died in 56 b.c. not only was he honored with a public ceremony, but the people requested he have a tomb in the Campus Martius. His family, however, declined this offer, opting to bury their relative at Tusculum in a tomb perhaps already constructed. 216

Notas

211. Wiseman 1987, 395–396. See Sallust’s comment (Cat. 12.4): Delubra deorum pietate, domos suas gloria decorabant.

212. Fulvio 1527, fr. 24; Marliani 1544, IV, 23; Marliana 1544, V, 24; Mauro 1556, 83.

213. P. J. Osmond, “Princeps Historiae Romanae: Sallust in Renaissance Political Thought,” MAAR 40 (1995) 101–143.

214. M. Verzár-Bass, “A Proposito dei Mausolei negli Horti e nelle Villae” in Horti Romani, 401–424.

215. Serv., ad Aen. 5.64, 6.152, 11.206.

216. Plut., Luc. 43.3.

Michael G. Heller - Capitalism, Institutions, and Economic Development

 

web

Introduction

Based on a timely reassessment of the classic arguments of Weber, Schumpeter, Hayek, Popper, and Parsons, this book reconceptualizes actually-existing capitalism. It proposes capitalism as an impersonal procedural solution to the problems of spontaneously coordinating public institutions that enable durable market-based wealth generation and social order. Few countries have achieved this. A novel contribution of the book is that it identifies a practical sequence of economic and institutional shortcuts to real capitalism.

The book challenges current orthodoxies about varieties of capitalism and relativist recipes for economic growth, and it criticizes culturalist and incrementalist viewpoints in institutional economics. It calls on the social sciences to help in constructing dynamic and prosperous open societies of the twenty-first century by reclaiming older ideas of ‘social economics’. Better and faster solutions will emphasize crisis-induced change, rational leadership, ideological persuasion, institutional engineering, rules-based market freedom, and the universalistic formal-procedural impersonality of optimal regulatory systems.

Chapter 1 - Institutional capitalism

A common fallacy of our time is that because the institutions of the more advanced countries evolved over many generations so too must the developing countries follow their own evolutionary path and slowly create institutions that match their special needs and values. Any effort to shortcut the evolutionary process, goes the argument, will be a recipe for disaster. The error of this view lies in the conviction that there are no universal truths about institutions, that a society only sets itself such institutional tasks as it can solve through original experimentation and learning, and that the task only presents itself when the social conditions for its solution already exist. The argument advanced in this book is that if an institutional solution has been tried and tested, knowledge of it can be used to advantage by other societies. With appropriate knowledge, motives, resources, opportunities and leadership, it is possible to compress the evolutionary process by imitating the successful institutional systems. Contemporary societies in transition to capitalism have no need to rediscover by a long and costly route of trial and error the institutions that enable durable prosperity and dynamic social order. The term ‘capitalism’ is used unusually in this book to describe a particular kind of institutional system found in the more advanced societies, one which has arisen as a solution to the problem of coordinating the institutional subsystems of market regulation, law, public administration, and political representation. This is a general solution manifested in rules about institutional procedures, rules about the functions of key institutional subsystems, and rules about the formulation and enforcement of rules. It is quite different from the everyday temporal and conjunctural solutions that must continually be found to resolve problems of context, such as new regulations for new markets or new methods for managing a public service. Rather it encompasses overarching principles that enable modern society to coordinate its institutional forces in such a way that the everyday tasks can be accomplished most effectively without threatening the survival and further evolution of the system. I will examine the institutional nature of capitalism, and priorities of institutional change in a capitalist direction, themes which have a long history in the social sciences. I draw on the scholarship of Weber, Schumpeter, Hayek, Popper, and Parsons, among others. In contrast to many present-day social scientists, these writers expressed considerable intellectual confidence in capitalism and had a keen sense of the policy dimensions of capitalist transitions. In exploring and adapting their work I have aimed for a composite and favourable analysis of capitalism’s institutional architecture and the methods of its construction. Two insights emerge, which can be the building blocks of ideas that communicate the nature of capitalist transition to the agents of change.

Chapter 2 - The modern state

I propose Max Weber’s theories as a foundation for a new approach to the study of capitalism and capitalist transition. Weber was born to a German merchant family in 1864. He died in 1920 before completing the writings assembled in Economy and Society (first published in German in 1922), his greatest work. Weber studied law, and he taught political economy at universities in Germany and Austria. Among his collaborators and friends were leading figures of twentieth-century economics and sociology, including Schumpeter, von Mises, Sombart, and Simmel. Weber left his characteristic mark on major intellectual controversies of the period. He was active in German politics, and wrote widely on sociology, economics, politics, law, philosophy, comparative history, and culture. The themes of his scholarship and his opinions on economic policy reflect his engagement in debates on the side of the German Historical School as well as on the side of its main rival, the Austrian School. Today, however, Weber is best known as one of the founders of modern sociology. His economic sociology offered perhaps the most rigorous twentieth-century counterweight to Marxian political economy. More broadly, and in the best sense of the term, Weber was a social scientist. His systematic development of methods and theoretical concepts for the social sciences dealing with social and economic action, rationality, bureaucracy, organization, and power is unmatched by any scholar before or since. Of most relevance in the present context is Weber’s central interest in the nature of ‘capitalism’. My argument grows out of Weber’s emphasis on the impersonal procedural norms of state institutions in capitalist societies. In addition, I present Weber’s theories of capitalism as explanations of the logic of a development strategy favouring (1) the construction of a parametric state with classical liberal economic functions, (2) market expansion as the driving force for legal reforms, (3) the short-run precedence of legal change over administrative and political change, and (4) the short-run precedence of political leadership over political participation. Weber clearly demonstrated, on technical grounds, why bureaucracy must be rationalized and why politics must be democratic in modern capitalism. In the absence of free political representation bureaucracy’s power escapes supervision and feeds on economic irrationalities. On the other hand, Weber’s theories can show why market-led and law-led transitional sequences to capitalism are usually more appropriate in developing societies than bureaucracy-led and democracy-led sequences. In this and the following chapter I will single out Weberian ideas that seem most relevant to the understanding of contemporary transitions to capitalism. Some steps in the analysis build on Weber’s concepts or suggest alternative concepts that fit better with current realities. His best-known essay, The Protestant Ethic and the Spirit of Capitalism (1992), which often misleads people about Weber’s view of the nature and origins of capitalism, is only briefly discussed. Weber himself said that this essay treats ‘only one side of the causal chain’ of capitalism (ibid.: 27). I concentrate on Economy and Society (1978), which can be read as a brilliant though somewhat inscrutable manual for the practitioners of capitalist transitions. My objective is to distil the practical inferences from Weber’s extraordinary vision of ideal state action, a chain of reasoning made up of many elements that are often only loosely held together under seemingly disparate thematic headings, and to reassemble the elements that most tellingly reveal the present-day potential for constructed capitalism.

Chapter 3 - Law and economy

Weber’s theories of capitalism provide compelling support for the argument that policymakers in developing countries should focus their initial reform efforts on economic liberalization and the construction of appropriate legal mechanisms to regulate markets. In the typical conditions of sequenced capitalist transition, the order of priorities gives proportionally less emphasis to building up state administrative and representational capacities. Weber’s relevant writings deal with the intertwined evolution of markets, ethics, and law over long historical periods during which capitalism began to emerge through trial and error in parts of Europe. Yet there are reasons to suppose that the causal chains which Weber observed during the original transitions will be similar during necessarily telescoped phases of contemporary development. The discussion of law in this chapter is relevant to debates on whether formal rules or informal norms and social relations are the foundations of economic trust. Trust between persons with shared morals improves market behaviour and substitutes for the formality of legal organizations. Weber (1978: 320) observed that in modern economies it is hardly ever necessary for partners in exchange to resort to third-party adjudication. Social convention may be ‘far more determinative of . . . conduct than the existence of legal enforcement machinery’. Ethical consensus compensates for the limitations of legal foresight and counteracts the many incentives to circumvent formal rules. However, in a complex social system made up of many organizations, reliable administration of law is the structure on which trust acquires incontrovertible force. Weber said: ‘To the person to whom something has been promised the legal guaranty gives a higher degree of certainty that the promise will be kept’ (ibid.: 667) At issue is the advantage of procedural certainty. In advanced economic and political exchange the source of ultimate trust is law, unambiguously guaranteed by neutral state power. Legal trustworthiness improves the calculability of outcomes in economic relationships: ‘Industrial capitalism must be able to count on the continuity, trustworthiness and objectivity of the legal order, and on the rational, predictable functioning of legal and administrative agencies’ (ibid.: 1095). Maintenance of market freedoms requires something more solid than amorphous social virtues. A modernizing society needs a rule-compliant economy in which contracts can be upheld independently of the personal authority of power holders. Strongly developed interpersonal or communitarian networks based on localized trust tend – especially when overarching frameworks of impersonal law are absent – to begin excluding outsiders in the effort to monopolize economic opportunities. In this way, they become obstacles to economic development. In reliably regulated competitive markets, the nebulous microfoundations of informal trust have less significance. During capitalist transitions, communitarian ethics are typically abandoned as economic actors transit from closed markets to open markets. As producers and consumers move beyond the internal economy and into the external economies, so too are their attitudes toward competition revolutionized.

Chapter 4 - Development in disequilibrium

This chapter outlines a theoretical framework for understanding institutional change during capitalist transitions. A central argument will be that the reciprocal conditioning of economic and institutional change is frequently a discontinuous rather than incremental process. Recurrent instability is a feature of both institutional and economic life during capitalism’s development. The economist, Joseph Schumpeter, gave a strong sense of this when he described the ‘jerks and rushes’ of industrial progress and its associated ‘social and cultural’ transformations.

Chapter 5 - Carriers of change

When motivated policymakers in developing countries set out to achieve a capitalist transition they need knowledge of the capitalist institutions that can be emulated, and knowledge of sequences and dynamics of institutional change. How is such knowledge created and how is it made available in the world? Can leaders and citizens in the developing countries be persuaded to take the capitalist path? What resistance will be encountered? What cognitive capacities are required? This chapter applies positive ideas about the agencies of change to a critique of approaches that emphasize interest-group, cultural, or cognitive constraints on reform. The objective is to restore two interlinked cognitive and volitional variables – ideology and rationality – to the centre of the analysis of capitalism and capitalist transition. The major political and economic systems of the world in the past century were shaped, for better or worse, by the ideas of intellectuals who knew the power of ideology and realized the potential of rationality. Hayek, for one, understood that ‘ideology may well be something whose widespread acceptance is the indispensable condition for most of the particular things we strive for’. Ideology is ‘the indispensable precondition of any rational policy, but also the chief contribution that science can make to the solution of the problems of practical policy’ (Hayek 1982: vol. 1, 58, 65). I will argue that ideology must be cognitive, rational, and scientific in order to motivate capitalist policy. Good policy, also, needs to be rationally formulated and implemented. Since these requirements of the transition to capitalism assume a preexisting level of knowledge of capitalism, it will be important also to take a hard look at how the social sciences interpret capitalism. Some summary definitions of the basic terms – ideology and rationality on one hand, and interest and culture on the other – will serve to introduce the argument. The Oxford English Reference Dictionary explains ‘ideology’ simply as ‘the system of ideas at the basis of an economic or political theory’. To this could be added that ideology aims to influence the attitudes and beliefs of a population with the intention of maintaining or changing the political or economic orientation of the social system. Ideology communicates belief in the relative legitimacy, justice, or effectiveness of a theoretical or empirical system of means to ends, such as could be applied to state policy. My understanding of ‘ideology’ is close to Mannheim’s definition of utopia, although Mannheim (1960: 184) understood utopianism as the opposite of ideology: ‘Ideas which later turned out to have been only distorted representations of a past or potential social order were ideological, while those which were adequately realized in the succeeding social order were relative utopias’. I understand ideologies to be cognitive rationalizations of concrete reality for ideal purposes. In contrast, Elster (1983: 141) describes ideology as ‘a set of beliefs or values that can be explained through the position or (non-cognitive) interest of some social group’. It is easy to agree that ideology is a biased belief, a disposition towards one opinion or interest rather than another. Yet ideology can be a true expression of socialscience data, founded on fact and logic. It can also be detached from the values or interests of the group or the individual. As a cognitive innovation rational ideology may be hostile to capitalism, or a carrier for the stock of knowledge favouring capitalist transition. ‘Rationality’ as it relates to policy is the effort to calculate optimum means to the end. One thinks rationally by applying a scientific style of reasoning to the decision. Weber said that ‘rational technique’ is ‘a choice of means which is consciously and systematically oriented to the experience and reflection of the actor, which consists, at the highest level of rationality, in scientific knowledge’ (Weber 1978: 65). Rationalism aims for precision in the estimation of the outcomes of an action, in order, as far as is reasonably possible, to control experience.

Chapter 6 - Models of crisis

Crises in developing countries provide an opportunity for the ideological determination of capitalist transition policy. The objective in this chapter is to identify the main forms of crisis, their causes, and the policy options arising during crises. I focus on two dynamic crisis-prone models of political economy – ‘activism’ and ‘neoliberalism’. A characteristic of activist and neoliberal models is that they do not transit successfully between the Weberian sequences of institutional reform – markets to law, law to bureaucracy, and bureaucracy to democracy – which this book depicts as the ideal path for emerging capitalism in the developing countries. Nevertheless, activist and neoliberal models – and their corresponding crises – will be described here as ‘developmental’. They are not the best methods of transition, but do have potential to generate change in a capitalist direction. Each can be an intermediate mechanism in so far as, for a period of time, an activist or neoliberal model increases the scope or quality of market activity, promotes economic growth, and achieves goals of social development. Three preliminary observations can be made. First, activist and neoliberal ‘developmental’ crises, unlike the Schumpeterian ‘long-wave’ crises discussed in Chapter 4, are in principle more likely to be avoidable. They are similarly ‘structural’, however, in the sense that they reveal an incompatibility between existing institutional forms and the pattern of economic change. Second, each of the progressive policy models – activist, neoliberal, and capitalist – are ideological in Hayekian terms. By viewing them as ‘transition ideologies’ we can compare the relative soundness of their scientific foundations and prescriptive utility. Third, crises in the developing countries, like Schumpeterian crises in the capitalist countries, tend to be recurrent. Crises that repeat at intervals provide recursive opportunities for sequenced institutional change. Development crises are ‘revolving doors’ of opportunity rather than merely ‘windows’ of opportunity for institutional reform. Crises that can help to transform societies are not rare events. The plan for the chapter is as follows. The first section proposes a typology of crises. Its purpose is to classify the kinds of crises that dysfunctional institutions cause, and their comparative transitional prospects. Once the variations in development crises have been identified, it should be easier to assess the knowledge that policy leaders require in order to exploit periodic volatility and propel capitalist transitions forward. The following four sections substantiate the theoretical claims and present an overview of activism and neoliberalism in East Asia and Latin America. The extended analysis of Latin America’s twentiethcentury economic-policy trajectory serves to illustrate several theoretical themes from earlier chapters, including state dysfunctions, government-business relations, and the role of leadership and ideology during policy transitions.

Chapter 7 - The transition sequence

Previous chapters have examined the institutional nature of capitalism and of precapitalism, general dynamics of institutional change, factors of human agency that drive change, and reasons why societies do not make the transition to capitalism. What are the relevant policy lessons? How might motivated and rational technocrats put transition theory into practice? How does the Weberian model translate into workable guidelines for reform? The plan of the chapter is as follows. The first section explores a policy priority sequence. The second section suggests a crisis-induced sequence of opportunities for initiating and sustaining capitalist transition. In the remaining two sections I look in more detail at how reforms might be implemented in the legal and administrative subsystems, and examine the insights that can be gleaned from literature on legal and administrative reform. For capitalist theory to be practically applied by policymakers it is necessary to bring to light and systematize the procedural principles that give shape and consistency to a ‘causal chain’ of market-led and law-led transformations, which lead, in turn, to the modernization of public administration and political representation. I propose a succession of discrete policy regimes of fairly short duration that overcome obstacles to the construction of institutions. The sequence is a mechanism for building state strength. Its key procedural goal is the depersonalization of the state.

Chapter 8 - Making the change

If, as historians state, history is rewritten every generation, it is not typically because subsequent evidence has developed clearly refutable tests of previous hypotheses but because different weights are assigned to the existing evidential material to provide different explanations consistent with current ideology . . . [Even] in the present world, replete with immense quantities of information, the ability of scholars to develop unambiguous tests of complex, large-scale hypotheses that are involved in explaining secular change is very limited. Therefore, competing explanations tend to have a heavy ideological cast.

State formation

Jørgen Møller - State Formation, Regime Change, and Economic Development (Routledge, 2017)

Representative institutions redux

In recent decades, the ‘Why Europe?’ question has attracted overwhelming interest in the social sciences. From having been a dusty, forgotten issue, primarily studied by historical sociologists, it is now a part of mainstream political science and economics. For example, over the last decade, the leading journal in political science, American Political Science Review, has published a series of articles that, often with the help of sophisticated statistical methods, address different aspects of the question (e.g., Acemoglu and Robinson 2006; Stasavage 2010; 2014; Hariri 2012; Woodberry 2012; Blaydes and Chaney 2013; Kokkonen and Sundell 2014). Similarly, the question has received attention from economists, an issue to which we return in Chapter 13.

It is thus hardly an exaggeration to say that much of contemporary social science – as in the late nineteenth and early twentieth centuries – revolves around the causes of the emergence of modernity in the West and the implications of this for the rest of the world. This new interest in old questions primarily seems to have been prompted by the following insight: only a historical perspective can enable us to understand the contemporary variation in economic prosperity and levels of democracy, particularly outside of Europe and the European settler colonies (e.g., Acemoglu et al. 2001; 2002a; Acemoglu et al. 2008; Hariri 2012). The more specific claim is that a series of medieval political institutions contributed to putting a leash on European monarchs and limiting their arbitrary exercise of power. These institutions were subsequently transplanted to some of the European colonies, where they facilitated economic growth as well as democratization.

What kinds of institutions have been attributed these tantalizing effects? As we shall see in Chapter 13, which addresses economic and political development outside of Europe, the answer to this question is not always clear. But it should be obvious that the representative institutions of the Middle Ages – Estates or parliaments and diets – form part of the core. Here, we can repeat Ertman’s (1997, 19) observation from Chapter 2 that these institutions alone were able to limit the monarchy’s exercise of power in a systematic manner.

The following pages are premised on this point. The purpose is to address a new body of literature on the origins and character of representative institutions. I have already reviewed Ertman’s (ultimately, Otto Hintze’s) account of why medieval representative institutions were stronger in some areas than others, and why they therefore had a varying impact on state formation and regime change. However, new research has been burgeoning in recent years. Most importantly, English political scientist David Stasavage has followed up on Hintze’s and Ertman’s analyses of the character and impact of the representative institutions in medieval Europe. Stasavage’s work has thus far resulted in two books (2008; 2011) and four scientific articles (2007; 2010; 2014; 2016). This chapter discusses this work and sets the stage for the next chapters, which use this medieval legacy to explain contemporary variations in economic and political development.

Surveying representative institutions

To explain a phenomenon, one first has to capture it. With this in mind, Stasavage compiles a dataset tallying representative institutions in twenty-four European states in the five centuries between 1250 and 1800 – the period to which Myers (1975) refers as the Age of the Polity of Estates. Instead of distinguishing between the number of chambers and whether or not the representatives were representing estate groups or localities, as Hintze and Ertman do, Stasavage (2010) maps the following:

(1) Does a representative assembly exist?
(2) Does the representative assembly have a veto on taxes?
(3) Does the representative assembly audit government spending?

The first condition is fulfilled if a collective assembly is found on the national level, convenes with some regularity, and at a minimum is consulted by the monarch. We find assemblies of this kind throughout Western (or Latin) Christendom in the Middle Ages. They emerge at different points in time: relatively early in Western Europe and relatively late in Scandinavia and East-Central Europe (Poland and Hungary). The only states in Stasavage’s dataset that do not live up to the first condition at any time in the period 1250–1800 are the duchies of Milan and Tuscany and, hardly surprisingly, Russia, which is the only state outside of Western Christendom that is tallied.

The second condition is more demanding as it requires that the assemblies have a veto on taxation. This was the core prerogative of most representative bodies, and this condition is fulfilled in the vast majority of the twenty-four states. In fact, among the states with representative institutions, Denmark and Naples are the only ones without. 1 The third condition is met if the representative institutions had a direct right to audit the monarch’s expenditure and possibly even decide over public spending. There are very few cases in which we find this prerogative (eight of Stasavage’s twenty-four states). In addition to city-states such as Siena and Florence, England after the Glorious Revolution in 1688 is an instance. Finally, Stasavage codes how frequently the representative institutions convene, ‘annually’ being the highest value and ‘never’ the lowest. 2

Geographic barriers for representation

What explains the variation captured in Table 10.1? And what explains why the frequency of assemblies was so different across this universe: from the city-states, where the assemblies met many times annually, via the almost annual meetings in states such as Württemberg, Austria, and England, to the extremely rare gatherings in states such as Denmark and France?

Stasavage’s attempt to answer this question begins with an apparent paradox. As we know from previous chapters, it is widely assumed that representative institutions made it easier to impose and collect taxes for the purpose of financing warfare, and they have also been seen as easing public borrowing and promoting economic growth. If only some of these postulates are correct, then why did the representative institutions not win out throughout Europe? And why were many states so slow to introduce them? These are the questions raised by Stasavage (2010) in the article ‘When Distance Mattered’.

The title hints at his answer. Boiled down to a single sentence, there were significant geographical barriers to representation. A myriad of researchers have linked democracy with the size of the political unit. This point is best illustrated by the direct democracies of antiquity, which required that all (male) citizens were able to participate in the popular assembly. But scholars have also been pointed out that many island states have been able to maintain democracy in the period following World War II, an observation that has been linked to their limited size, which has made it easier to create a sense of political community (Dahl and Tufte 1974).

The representative institutions of the Middle Ages were not particularly democratic (see Møller and Skaaning 2013, Chapter 4). However, Stasavage argues, this does not alter the fact that geographical barriers had at least as much significance for how they worked. In Europe of the High Middle Ages, traveling great distances was associated with exorbitant costs – measured in time as well as money. The network of Roman roads had fallen into disrepair in the Early Middle Ages. In fact, it was mostly the memory of them that remained by the year 1200, at which time the representative institutions were emerging. Some improvements were made around this time, but it was only really after 1800 that large-scale advances of European infrastructure began to occur. In other words, transport was extremely cumbersome throughout the period Stasavage analyses. 3

Stasavage argues that this affected the impact of representative institutions on public borrowing. Here, he invokes economic theories about corporate finance. One of the key insights of these theories is that a common condition for being able to raise new funds for investments is that the borrower accepts external control or at least monitoring. However, such control can be so costly that potential investors pull back for this reason alone (2010, 625–626). Stasavage draws an analogical inference about the medieval representative institutions, the point being that the cities’ representatives would only go along with raising funds for the monarch if they were allowed to monitor how he spent them, but that such ex-post control could easily become too costly if geographical barriers prevented the representatives from meeting with some regularity. 4

Stasavage accordingly reasons that a state’s geographical size will have an impact on (i) the existence of representative institutions, (ii) how frequently they were called, and (iii) whether or not they had the right to oversee public spending. Conversely, he does not expect to find a relationship between geographical size and a veto on taxation, as this does not require a high meeting frequency. Stasavage applies these expectations in a series of statistical analyses in which he supplements the information from the dataset above with a number of control factors, including indicators measuring the presence of external threats and the size of the population, respectively. The intuition behind the first control variable is that the threat of war can trigger the summoning of representative institutions – and for that matter bring about an expansion of the prerogatives of these assemblies. The reasoning behind the second control variable is that the per capita expenses related to warfare will be greater in areas where the population is smaller. Finally, Stasavage controls for urbanization by rerunning his analysis without the city-states that are included in the dataset – on the basis of the potential objection that the representative institutions in these states were peculiar.

Stasavage measures geographic barriers in several different ways, including the average distance any representative would have to travel – ‘as the crow flies’ – in order to participate in an assembly. More specifically, he tests his expectations in two different ways. The first analysis operates on the ‘national’ level – that is, across the national units described in Table 10.1 above. As a next step, Stasavage shifts the level of analysis to the regional level by repeating his analysis on the French regions that had separate representative institutions. That is, Stasavage investigates whether there were also geographical barriers to representation within France.

What do the analyses show? Stasavage finds that geographical size has a very consistent, statistically significant, and substantial effect: first, in terms of whether or not a representative assembly existed; second, whether it exercised oversight over public spending; and third and finally, on how frequently it met. For example, the assembles in the quartile of the smallest states in the dataset met on average more than once every second year, while the assemblies of the corresponding quartile of the largest states met less than once every third year. Conversely, as expected, there is no correlation between geographical barriers and whether or not the representatives have a veto on taxation (2010, 636–637).

Stasavage uses this baseline to predict how often the French regional Estates were convened. The model provides a reasonably good prediction of the meeting frequency in eleven of the thirteen regions. The two exceptions are Normandy and Brittany, where the regional Estates convened surprisingly often considering the large size of these units. Finally, Stasavage repeats his national analysis but substitutes the French regions for France. The results are again robust, which is reassuring in as much as it is rather artificial to work with ‘national’ units in the medieval world. France is thus not the only country with regional Estates. The same applies to the Holy Roman Empire, which had a single representative assembly (the Imperial Diet – Reichstag), but where Stasavage has instead coded the assemblies in the individual states (Landtage).

A final objection is that, over time, the political institutions might have an impact on how large a given state is (or, rather, becomes). If a certain kind of representative institution made it easier to borrow or charge money for warfare, this should make it possible to swallow up neighbouring states that did not have the same advantage – as money is the fuel of warfare. Conversely, one might imagine that authorities that are not accountable to a representative assembly would be able to engage in ambitious foreign policy more easily, which might provide opportunities to increase the size of the state in question. In both cases, this would undermine Stasavage’s test of the relationship between geographical barriers and the characteristics of the political institutions. However, Stasavage also takes this into account in his test and dismisses this objection.

Representative institutions and public borrowing