Hello! As you know, human beings are very stubborn, and are even more stubborn when it comes to learning from past mistakes. That being said, welcome to the blog about ways in which history repeats itself and how human society never learns to evolve in certain areas. In this post I will be discussing economics of Ancient Greece compared to the economics of North America today, specifically the contrast between GDP, per capita consumption, the wage of the average worker, and the exploitation of the average worker. I will argue that GDP is a highly ineffective measure to gauge how well individuals in society are faring and that this issue is just as prevalent in Ancient Greece as it is in modern society.
To begin analyzing this, we can look at the average wage of workers in Ancient Greece and the amount of economic inequality between classes that was present. In Ancient Greece, there was a “Standard wage of one drachma per day at Athens.” which “supposedly applied to all classes of workers, skilled and unskilled.” (Silver, 257) .The amount of one drachma per day is admittedly a very good wage as it was enough for a relatively comfortable life. As Engen states, “One drachma was enough to buy food for a family of four for four days.” (Engen, 9) This would suggest that the level of economic inequality in Greece is quite low, and this would hold true if not for the sharp departure from a standardized wage in 412B.C where wages became varied based on economic variations at a national level (Silver, 258). Following this change, economic disparity grew as Greece functioned as a slave economy where free men would collect their wages for themselves but slave workers would collect wages for their masters and only be provided with food, shelter, and a small excess of the wage (Silver, 258.). This led to wealthy slave owners hoarding gross amounts of income, employers being subsequently less likely to hire free men, and wealthy individuals dominating economic society. These wealthy aristocrats would then use their economic power to exploit the lower working class in favour of more wealth. For example, ““At a time when the price of grain in Egypt was ten drachmae <a measure> ,1 Cleomenes sent for the growers and asked them at what price they would contract to supply him with their produce. On their quoting a price lower than what they were charging the merchants, he offered them the full price they were accustomed to receive from others; and taking over the entire supply, sold it at a fixed rate of thirty-two drachmae for the same measure.” (Aristotle, 1352b). Actions such as this, where aristocrats exploit common farmers and lower-end workers, lead to a harsh level of economic inequality festering in Ancient Egypt through 400BC onwards.
In comparing the average wage and the economic inequality of workers in modern North America, we can view similar patterns. Throughout the 1950s to the 2000s, economic inequality amongst United States workers only grew. Andrew Gelman notes that “Recent decades have seen a striking rise in income inequality in the United States” (Gelman, 1203). When analyzing specific points of data we can see that in the 1970s, the top 10% of workers in the United States held roughly 25% of the total income, in the 2000s the top 10% held well over 50%, and in 2010 this number continues to grow past 65%(Gelman, 1207). The wealthy top 10% of America today is heading towards a top 1% where the fewest members of society dominate the economy and the as a result the GDP of the state. To compare, the mandated minimum wage in USA today is $7.25 per hour, or $58 a day. This wage is nowhere near enough to feed a family of four, as the one drachma was in pre-412bc Ancient Greece.
Both the United States and Ancient Greece function on a system of debt management and debt accrual. Ancient Greece was in a continual system of wars which lead to leaders hiring mercenaries which, in many instances, they could not pay initially and would incur a future debt. Aristotle (1347b) observed that “The people of Chalcedon had a large number of mercenary troops in their city, to whom they could not pay the wages they owed. Accordingly they made proclamation that anyone, either citizen or alien, who had the right of reprisal against any city or individual, and wished to exercise it, should have his name entered on a list.” This trend is observable throughout many instances of wars in Ancient Greece, though not always with mercenaries. For example, leaders would often buy farmers stocks and agree to pay at a future date, though this would not always get paid. (Aristotle, 1347b) Even with these injustices being dealt to the workers by the aristocrats, the GDP and per capita consumption of the state would still technically be increased, even in a one-way debt transaction that leaves the workers worse off. In order to accrue the funds that can pay these debts to the workers and mercenaries, the state would often invoke laws and measures that draw higher taxes from the peoples, resulting in further damage to the economy of the average worker. Several examples of these laws can be observed in different sections of society, including a “law forbidding their women to wear gold and ordering them to lend the state what gold they had in their possession.” (Aristotle, 1349a) and “Offering any citizen who was willing to pay a fixed sum the right of having his name inscribed on a pillar of their temple as a donor thereof” (Aristotle, 1349a). The city-state of Athens even began charging a fee of one drachma to pass dead soldiers through their gates, not only to increase state revenue but to prevent falsifying information of death dates(Aristotle 1348a). Each of these laws, including the raising of general taxes, led to inarguably lower wealth of the common man while simultaneously drastically increasing the GDP and consumption rates of the state. Walter Scheidel notes that “In ancient Greece between 800 and 300 BCE, per capita consumption rose by about 50-100%” (Sheidel, 743) while also noting that “The extensive economic expansion after 300 CE was the result of a preceding depression” (Sheidel, 750). These observations note together that while the GDP of a state can increase on paper based on consumption, even when averaged per capita, this does not necessarily reflect the economic well-being of the common worker. Rather, it is directly by the exploitation of the common worker, the economic inequality, and the incurrence of debt that the GDP is increased in both Ancient Greece and modern United States, leading to an inaccurate representation of the success of a state, as evident by the impending depression that faced Ancient Greece following 300CE and the several depressions faced in modern society under the same economic trends.
Works Cited
Aristotle. Aristotle in 23 Volumes, Vol. 18, translated by G.C. Armstrong. Cambridge, MA, Harvard University Press; London, William Heinemann Ltd. 1935.
Gelman, Andrew, et al. “Income Inequality and Partisan Voting in the United States.” Social Science Quarterly, vol. 91, no. 5, 2010, pp. 1203–1219. JSTOR, www.jstor.org/stable/42956457.
Scheidel, Walter. “Demographic and Economic Development in the Ancient Mediterranean World.” Journal of Institutional and Theoretical Economics (JITE) / Zeitschrift Für Die Gesamte Staatswissenschaft, vol. 160, no. 4, 2004, pp. 743–757. JSTOR, www.jstor.org/stable/40752488.
Silver, Morris. “Slaves versus Free Hired Workers in Ancient Greece.” Historia: Zeitschrift Für Alte Geschichte, vol. 55, no. 3, 2006, pp. 257–263. JSTOR, www.jstor.org/stable/4436815.
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