The Rational Optimist_ How Prosperity Evolves - Matt Ridley [77]
So the typical Akkadian tamkarum or merchant was a businessman of the most surprisingly modern kind, who depended for his livelihood on freely exchanging goods for profit. Though there was no minted coinage, from the end of the fourth millennium BC there were silver-based prices, which fluctuated freely. The temple would act as a sort of bank, lending money at interest – and the Uruk word for high priest is the same as the word for accountant. By 2000 BC, under the Assyrian empire, merchants from Ashur operated in ‘karum’ enclaves in the independent states of Anatolia as thoroughly modern entrepreneurs with ‘head offices, foreign branch-plants, corporate hierarchies, extra-territorial business law, and even a bit of foreign direct investment and value-added activity’. They bought gold, silver and copper in exchange for tin, goat-hair felt, woven textiles and perfumes shipped in on caravans of up to 300 donkeys. The profit margin was 100 per cent on tin and 200 per cent on textiles, but it had to be because the transport was unreliable and the risk of theft high. One such merchant, Pusu-Ken, operating in a tax-free zone in the Anatolian city of Kanesh, was to be found in 1900 BC lobbying the king, paying fines for evading textile import regulations imposed by the assembly, and sharing profits with his investor-partners, sounding in other words every inch the modern chief executive. Such merchants ‘did not devote themselves to trading in copper and wool because Assyria needed them, but because that trade was a means of obtaining more gold and silver’. Profit ruled.
In these Bronze Age empires, commerce was the cause, not the symptom of prosperity. None the less, a free trade area lends itself easily to imperial domination. Soon, through tax, regulation and monopoly, the wealth generated by trade was being diverted into the luxury of the few and the oppression of the many. By 1500 BC you could argue that the richest parts of the world had sunk into the stagnation of palace socialism as the activities of merchants were progressively nationalised. Egyptian, Minoan, Babylonian and Shang dictators ruled over societies of rigid dirigisme, extravagant bureaucracy and feeble individual rights, stifling technological innovation, crowding out social innovation and punishing creativity. A Bronze Age empire stagnated for much the same reason that a nationalised industry stagnates: monopoly rewards caution and discourages experiment, the income is gradually captured by the interests of the producers at the expense of the interests of the consumers, and so on. The list of innovations achieved by the pharaohs is as thin as the list of innovations achieved by British Rail or the US Postal Service.
The maritime revolution
Still, you cannot keep a good idea down. Around 1200 BC, the power of both Egypt and Assyria waned, the Minoans fell, the Myceneans fragmented and the Hittites came and went. It was a dark age for empires, and like the later Dark Ages that followed the fall of Rome, this political fragmentation, perhaps aided by a population decline, caused a burst of invention as demand rose among free people. The Philistines invented iron; the Canaanites the alphabet; and their coastal cousins, the Phoenicians, glass.
It was a different Phoenician invention, the bireme galley, that truly created the classical world. The people of Byblos, Tyre and Sidon lived close to great forests of magnificent cedars and cypresses, the hard, aromatic planks of which made especially durable