ENTREPRENEURSHIP IN THE ANCIENT NEAR EAST
SOME PRELIMINARY OBSERVATIONS
Working Paper 2012
Monika Poettinger
Bocconi University, Milan
Monika Poettinger, ENTREPRENEURSHIP IN THE ANCIENT NEAR EAST. SOME PRELIMINARY OBSERVATIONS
INTRODUCTION
"To eat modestly does not kill a man. But gluttony is lethal. To eat a little is to live splendidly. When you walk
around, put your feet on the ground!”
(Sumerian Proverb)
In this paper I will highlight some questions arising from the application of the categories of
entrepreneur and enterprise to ancient economic history, particularly the Near Eastern one. No
corresponding definitions are to be found in contemporary sources, so the question arises if it is
correct to over impose such definitions on individuals and institutions at a time when they would
have been devoid of meaning. In particular, it seems, recent historiography on ancient Near East
economies uses the terms entrepreneur and enterprise, concerning mostly the activity of
merchants or former functionaries, to define private economic initiative and private property of
productive means. This interpretation tends to artificially create a divide between a public and a
private sector, with the aim of reconstructing the slow emergence of a market, efficient and
growth bearing, in between the loosening fabric of the palace economy. The newborn market
economy, fleeing the excessive bureaucracy of Eastern Empires, is then reported to gradually
expand toward the West bringing civilization in its wake.
Such positivistic historiographical attitude is underscored by modern economic theory, preaching
an idealistic view of economic interactions dominated by natural laws. Even if for historians
positivism is hardly an issue anymore, economists still see the long millennia of human
development as the struggle of free market institutions to prevail over less efficient ones. Even
many economic historians subscribe to such implicit view, seeking over time and space the signs of
this battle for economic progress. As with nineteenth century positivism, such economic positivism
may also have a slight evolutionary coloring: the more averse to free market interplay a political
construction or a social institution, the easier to impute its decadence to its evoked economic
inefficiency. Market economy is de facto considered the best just because it emerged, last, from a
process of natural selection.
This holy quest for the market’s springs bears the risk not only of being sterile, but also of
distorting historical research, imposing a view of past economic interactions in terms of today’s,
causing more than one misinterpretation. Back to entrepreneurship this means, for example,
exaggerating the competition between the private and the public sector of Near East’s ancient
economies losing sight of their real functioning. It means also using the term entrepreneur
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Monika Poettinger, ENTREPRENEURSHIP IN THE ANCIENT NEAR EAST. SOME PRELIMINARY OBSERVATIONS
inappropriately and reductively in respect to its real historical value born out of Enlightenment
and industrialization.
It still might be fruitful to use recent theories and concepts regarding modern enterprises and
entrepreneurs in studying ancient Near Eastern economies, bearing in mind though the profound
differences that even similar institutions or actions when pertaining to periods divided by
millennia would entail in terms of implicit rationality of the decision process and of chosen ends to
individual and social action.
RATIONALITY AND ENTREPRENEURSHIP IN ANCIENT ECONOMIES
“Who compares with Justice? It creates life. Should Wickedness exert itself, how will Utu succed!”
(Sumerian Proverb)
Economics today answers the question of the efficient use of scarce resources, proposing the
market as the best solution. But what if this wasn’t the economic problem of antiquity? What if
resources were not scarce at all and market interactions impossible or rare given the low density
of population? Wouldn’t then the very problem and its solution change?
Weber would term this a problem of rationality. Broadly defining rationality as the effective use of
means towards an end, every epoch would be characterized by its own means and its own ends.
Choices are made, decisions taken according to the respective rationality, depending on means at
disposition and chosen ends. Such different rationalities are not comparable across time.
Economic action today is based on economic calculus aimed at economic ends: economics has
gained independence from ethics or politics. This was not the case in ancient Near Eastern
economies. The main economic problem of the time was gathering widespread resources and
collecting labor force for infrastructural works without the possibility of market interplay for goods
or means of production.
The problem in antiquity then was one of economic organization in absence of a market. As late as
in the first Greek writings on economics, oikonomia was still the art of administration, an
administration encompassing all levels of social aggregation: the family, the city, the satrapy and
the kingdom. Although the complexity of the organization changed across all levels, the principles
and the rationality governing the decision process remained the same. Its principal actor was the
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Monika Poettinger, ENTREPRENEURSHIP IN THE ANCIENT NEAR EAST. SOME PRELIMINARY OBSERVATIONS
family father, the just administrator, defined by his place in the family (including servants) and by
his military and/or political role in the city state. His economic actions were a mere consequence
of his private and public roles and his economic decisions were the result of a rationality that
comprised considerations pertaining to all roles. Even if Xenophon’s Ischomachus acquired
akribeia as a mental habitus, his decisions were tied to social values and political calculations. A
rationality completely different from the modern one: gain was no end to economic action, much
more so justice, technology a far less used mean than warfare, pillage and enslavement.
Can we trace back this economic thinking, this rationality to ancient Near East?
To tentatively answer this question it would make sense to take as a time basis the three Millennia
from 3500 to 500 B.C., a period borne with the urban revolution, decupling the productivity of the
neolithic economy, and closed by the emergence of the Persian Empire, tripling the preceding
population and production levels. Inside these boundaries the Near Eastern economy was
characterized by a substantial stasis and the permanence of the same mode of production. A
Sumerian proverb nicely resumes the basis of this economy: “He who has silver, he who has lapis
lazuli, he who has a cow, he who has a sheep, must wait in the gate of the man who has grain”.
If the mode of production didn’t change, though, Oikonomia changed: organizations varied in
dimension and subsistence base, through an ebbing of construction and deconstruction of political
entities, so as to grant the most efficient collection and management of resources. Such ebb and
flow were the result of the main means to enlarge production or grant necessary resources: war
and predatory practices. So it happened that first commercial contacts usually generated later
conquests. Resources were not just there to be taken but had to be taken to be submitted to the
economic control of the ruling administrative center. This rationale of economic action is
confirmed by the widespread use to mystify commercial contacts at the highest palace level as a
mere exchange of gifts or collection of ransom in the eyes of internal bureaucracy and wider
population. The end of economic action, the ideal guiding decision making, is so revealed as
exiting the market, not entering it.
The concept of entrepreneur has no explicative force in such a context. Much more so, instead,
that of enterprise. Coase made out of the modern bureaucratic enterprise an organization of
economic production alternative, opposite even, to free market. Accordingly an enterprise is
borne when market interplay becomes more costly than internalizing resources and labor. Such
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Monika Poettinger, ENTREPRENEURSHIP IN THE ANCIENT NEAR EAST. SOME PRELIMINARY OBSERVATIONS
was evidently the case of the ancient Near Eastern palace economy when the absence of a market
structure constrained to the alternative bureaucratic solution. The first temples that organized
production and gave rise to the urban revolution testimony of such a process.
Such temples and later palaces had all the characteristics of Weber’s bureaucracy: the division of
labor, the professionalization of careers, the need for specialized schools, the secrecy of acts, the
interplay of power and the universality of rules to govern decision making. An example of that last
characteristic is given by the lists of relative equivalences between goods through which
accounting acts were compiled.
These bureaucratic structures, as the big businesses borne by the second industrial revolution,
generated organizational capabilities granting long lasting economic primacy to the societies firstly
deploying them. These capabilities, comprising writing, mathematics, juristic formalization and
state construction, were the driving force behind the steadily expansion of the palace economy.
A last feature that palace economies share with modern big businesses is that property of the
means of production was in the hands of institutions not of individuals. One of the reasons for the
insurgence of joint stock companies in the nineteenth century, particularly in sectors in with
particularly high capital requirements as infrastructures and financial services, was to avoid
problems connected with succession: having to question property rights, dissolve and reestablish
companies every time one of the associates died caused havoc in ordered economic activity. From
an organizational point of view an immortal God as capitalist is quite a brilliant solution of the
problem. A king, instead, brings back problems of inheritance and legitimacy while incurring at the
same time in principal-agent problems in relation to the administrators of the regions under his
control.
Even if, as seen, some concepts and theories on enterprises could be useful to historians studying
the ancient Near East, it must be borne in mind that an economy solely organized around
bureaucratic structures is completely different from a modern economy where big businesses are
immersed in well-functioning markets. Markets, through their many players both on the
consumption and the production side, competing with one another and in possess of complete
information, lower down to a minimum the use of power in economic interplay. Sectors
characterized by the presence of big enterprises, instead, are mostly oligopolistic: businesses have
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Monika Poettinger, ENTREPRENEURSHIP IN THE ANCIENT NEAR EAST. SOME PRELIMINARY OBSERVATIONS
a measure of market power. Next to the power that can be exercised on external actors,
bureaucracies also entail power in their internalized exchanges.
An economy formed by gigantic bureaucracies in absence of markets is so almost completely
based on power exchanges. Such power must be legitimized, otherwise the system could not
function (Weber, 2006). More than on codified law as in modern societies, the legitimation of
palace organizations came from a general concept of justice personified by a priest or king, acting
accordingly to the will of a benevolent God. Was this the origin of the concept of the good family
father to be found in later Greek writings on oikonomia and up to today in Roman Law Codexes?
In this context justice meant procuring and organizing resources as to most efficiently use them,
without letting any part of the social body prevail over others in the process. Whenever some part
of this balancing act went wrong, the failure was later interpreted as the sign of God’s displease
toward Her/His administrator’s acts. No wonder every new enthronization was followed by an act
of justice as the redemption of debts and every king particularly valued his image as a just ruler.
If such idea of justice implied an economic concept of equilibrium is plausible but much more
difficult to ascertain. The circular flow of resources and products being brought to the temple or
palace and then redistributed as income or capital to all members of society surely can be
represented as some sort of equilibrium, although an equilibrium not based on prices and
competition to grant efficiency, but instead on a just administration that maintained the regularity
of flows.
Such an equilibrium did not exclude economic growth, resulting from new infrastructural works or
of conquests, so long as it didn’t change the fundamental ordered functioning of the organization.
At the same time, gain was not perceived negatively if it didn’t significantly alter the general
justice of the system. But the real end of economic action was neither growth nor gain, but the
maintenance of the system. Given such end, decisions would be taken accordingly, completely
differing from the ones taken in modern businesses, profit oriented.
Surely there was a measure of Protestant ethic in the ancient Near Eastern approach to religion.
“Whose favourite is the fattened rich men? He who waits on his God has a protecting angel. The
humble men who fears his Goddess accumulates wealth” states the Babylonian Theodicy. But here
again this modern trait pertained first and foremost to the institutional level. The temple being the
center of economic activity it easily follows that earthly economic success corresponded to the
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Monika Poettinger, ENTREPRENEURSHIP IN THE ANCIENT NEAR EAST. SOME PRELIMINARY OBSERVATIONS
favor of God. Gods themselves where ordered in hierarchies or genealogies according to the
relative success of the cities they particularly protected, while kings were reported in mythological
accounts as good or bad examples in relation to the success of their administration. The end of the
religious action was so to bring down to earth the cosmological order pertaining to Gods, a
confirmation of the centrality of oikonomia and the related rationality.
Given these few considerations, it is clear that some concepts borne to explain modern
enterprises can be relevant for the study of ancient Near Eastern economies, with some caveats,
though. Even if the origin of palace economies resembles the birth of big businesses at the end of
the nineteenth century, the rationality governing economic action in the two contexts remains
hardly comparable.
JASON AND THE ANCIENT ENTREPRENEUR
"Son of Poseidon of the Rock,
the minds of men are all too quick to praise
deceitful gain above the right,
though they are moving to a bitter morning after;
but you and I ought rule
our passions with justice
and weave the web of future wealth.(.)
It is unfitting for us two to sever
with bronze-biting swords or spears
the great birthright of our forefathers.
For I give to you the flocks and tawny herds
of cattle and all the fields,
which you extorted from my parents
and manage now to fatten up your wealth;
it does not trouble me that these
glut your house;
but that monarchial scepter and throne
on which, presiding once, the son of Creutheus
guided his judgments straight
to a race of horsemen;
all these without our mutual strife
surrender to me, lest from them arise
some newer evil." (Pindar)
Most of the historiography on ancient Near Eastern economies revolves around the dichotomy
public/private sector. Some historians argue for the absolute prevalence of temple and palace
over individuals and marketplace; others painfully reconstruct private archives of families and
tradesmen to demonstrate the liveliness of a private sector; lastly it is even possible to classify all
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Monika Poettinger, ENTREPRENEURSHIP IN THE ANCIENT NEAR EAST. SOME PRELIMINARY OBSERVATIONS
of ancient economies, up to the Roman Empire, according to the relative relevance of one sector
over the other.
It is troublesome to accept such view, considering that no such dichotomy was apparently felt at
the time. The changing ownership structure of land, from God to king, from king to functionaries
or from communities to king or tradesman and the like, was accepted so long as it preserved the
functioning of the system, or even was favored if thought to enhance its efficiency. The same for
the capital necessary to agriculture, firstly advanced by the temples themselves and then by
former functionaries, merchants or landed proprietors. The slow enslavement of the former
salaried workers or independent farmers, though, was considered a breach of the general
equilibrium of the system and debt redemption decrees were regularly issued to preserve justice.
The ancient Near Eastern economy, far from being static as it is often perceived, was not only
continuously expanding, but also incessantly changing. After the urban revolution, the range of
economic action grew steadily and so the frequency of economic intercourse. The scale of
oikonomia changed, it stratified in the categories classified in the pseudo-Aristotle’s Oikonomicon:
the kingdom, the satrapy, the city and the family. During this process, palace ownership of land
and control over means of production could well be substituted or integrated by individual
ownership and control, so long as it served the efficiency of the system, allowing resources to flow
to the administrative center and the center to fertilize its dominions with huge capital transfers in
form of infrastructural works.
A clear distinction between public and private sectors is not fruitfully to be applied into such a
context. Mercantile activity is reported in all the period under consideration and merchant
communities were firstly depicted at the direct service of the temple, then conducting business on
a private basis, not only organizing trade, but also managing cloth production and autonomously
operating colonies abroad. The Šamaš Hymn is ample proof of this. The God Šamaš, protector of
seafarer merchants, is called upon to guarantee the good practices of merchants in general:
“What is he benefited who invests money in unscrupulous trading missions?
He is disappointed in the matter of profit and loses his capital.
As for him who invests money in distant trading missions and pays one shekel per.,
It is pleasing to Šamaš, and he will prolong his life.
The merchant who [practices] trickery as he holds the balances,
Who uses two sets of weights, thus lowering the.,
He is disappointed in the matter of profit and loses [his capital].
The honest merchant who holds the balances [and gives] good weightEverything is presented to him in good measure [.]
The merchant who practices trickery as he holds the corn measure,
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Monika Poettinger, ENTREPRENEURSHIP IN THE ANCIENT NEAR EAST. SOME PRELIMINARY OBSERVATIONS
Who weighs out loans (or corn) by the minimum standard, but requires a large quantity in repayment,
The curse of the people will overtake him before his time,
If he demanded repayment before the agreed date, there will be guilt upon him.
His heir will not assume control of his property,
Nor will his brothers take over his estate.
The honest merchant who weighs out loans (or corn) by the maximum standard, thus multiplying kindness,
It is pleasing to Šamaš, and he will prolong his life.
He will enlarge his family, gain wealth
And like water of a never failing spring [his] descendants will never fail.”
Merchants depicted in the hymn are not different from merchants of every age, but their activities
and the market exchanges they generated where part of oikonomia, one means to the end of
efficient economic organization. More than a necessary evolution toward natural and efficient
economic exchanges, the activity of merchants in ancient Near East testimonies how
administrative centers were open to innovative economic practices in order to achieve their end.
In this sense market exchanges were a substitute to power exchanges. The choice between the
two was done in view of the respective effectiveness procuring a necessary resource to the central
organization.
The procurement of resources, corresponding in Greek writings to chrematistics, an economic
activity condemned and artificially separated from oikonomia by Aristotle, in ancient Near Eastern
economies was as vital as organization. Chrematistics and oikonomia were both necessary to bring
cosmological order into human chaos and so generating wealth. The procurement of resources,
though, was an activity much better suited to individual effort than organization. If
entrepreneurial spirit is to be found in antiquity it should be here.
Contrary to the administration of the system, calling for complex bureaucracies and specialization,
the acquisition of resources demanded for little adventuresome groups guided by a leader. Such
were merchants and kings alike when they took mules or war chariots and traveled over the
borders of the ordered world into unknown land to explore new territories and find new sources
of wealth. From the cedars of Gilgamesh to the golden fleece of Jason such economic ventures
were always depicted as heroic deeds, a circumstance that should caution against an
indiscriminate use of the term entrepreneur even in these cases.
Entrepreneur, from the first appearance of the term to nowadays, has had an exclusively
economic significance: someone whose income is uncertain for Cantillon, the organizer of the
factors of production, connection between supply and demand for Say, the capitalist in classical
political economy, the innovator for Schumpeter. From the eighteenth century onwards the spirit
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Monika Poettinger, ENTREPRENEURSHIP IN THE ANCIENT NEAR EAST. SOME PRELIMINARY OBSERVATIONS
of capitalism thusly unfolds in the fact that profit seeking activity becomes an end to itself and so a
person systematically dedicated to it merits his own denomination.
In ancient Near Eastern economies, instead, the procurement of resources and wealth could be
done, as seen, both through economic intercourse as with military campaigns, having as driving
force a merchant as a general or the king himself. Its end was concurring to the ordered
functioning, to the equilibrium of the general administration. There is no space here for wealth or
profit as a personal end of action. Success in chrematistic enterprises was surely a sign of God’s
favor, but the resulting gain had to be invested in better infrastructures, in wealth for the
population in general. Ceremonial inscriptions of kings were full of such deeds. When in the X
century B.C. Tiglatpileser I, for example, emulated Gilgamesh in gaining Lebanon’s cedars, he still
did so to enrich the Temples of Anu and Adad.
Luxury consumption, instead, was condemned: Elamic warriors were subject to Assyrians’ derision
for their display of futile ceremonial fittings in battle, while in the Babylonian Theodicy the wealthy
amassing riches would prematurely end their life at the stake. Greek legends regarding king Midas
and Croesus only elaborate on these sources.
Pindar’s Ode dedicated to Jason well resumes this conception. In a speech held to the usurper of
his throne Jason warns him of the necessity to rule passions with justice to weave the web of
future wealth. Flocks, herds and fields are nothing if they are not accompanied by a just rule. Jason
is not worried about the usurper’s personal enrichment, what could cause newer evil is for such a
person to rule. Similarly the Babylonian Mirror of the Prince menaced: “If a king does not heed
justice, his people will be thrown into chaos, and his land will be devastated”.
Central to Jason’s speech the contraposition of wealth and power, of gain and justice. Someone
dedicated to profit is not fitted to rule. A prejudice that would live on to the eighteenth century.
The contrast thusly born between private interest and social justice would monopolize economic
thinking up to the writings of Mandeville and Adam Smith.
Albeit recent studies analyzing the activity of Old Babylonian tamkārum, the social role of
merchants in ancient Near East could not countervail this negative judgment. Tamkārum in Larsa,
in the period of their most documented presence around 1800 B.C., were a limited number, 53
over a period of 61 years, mostly under the rule of Rim-Sin, They did not join a guild, had many
private intercourses but also worked for the palace, advanced capital for many enterprises but
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Monika Poettinger, ENTREPRENEURSHIP IN THE ANCIENT NEAR EAST. SOME PRELIMINARY OBSERVATIONS
also heavily invested in land. They were still profoundly embedded in the palace economy, too
much to change the rationality of the system.
Was there, then, space for an entrepreneur in ancient Near East?
Taking into consideration the chosen ends to economic actions, at the highest level
entrepreneurial action was always tempered by justice, while at the individual level social and
political roles always competed with profit-seeking in the decision making of merchants and
landlords. So merchants remained merchants, princes continued to be princes and there was no
need to search for a term with the semantic value of the modern entrepreneur, champion of
economic rationality, bearer of the spirit of capitalism.
If the modern entrepreneur has no place in antiquity, there is no reason why the modern
definition of entrepreneur might not contain some ancient value. From this point of view,
Schumpeter’s entrepreneur, capable of disrupting static economic equilibrium through his
capacity to innovate, finds a valuable ancestor in the very same Gilgamesh chanted in his Epic as:
“the one who opened up the passes through the mountains when we were afraid to go there. He
was the one who dug the canals across the plains even to the mountains. He crossed the ocean as
far as the sunrise. He found the edge of the world…”.
In search of new resources and new knowledge Chrematistics, done via the political use of
merchants or the heroic deeds of princes and kings, went beyond the boundaries of the
bureaucratic administration of ancient Near Eastern economies, exactly as Weber’s entrepreneur
would be the only one to escape the rationalization and bureaucratization of modern societies.
Gilgamesh and Jason should so remind us that there is more than a rational man in nowadays’
entrepreneur and not all of ancient Near Easter economies was bureaucratically organized.
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Monika Poettinger, ENTREPRENEURSHIP IN THE ANCIENT NEAR EAST. SOME PRELIMINARY OBSERVATIONS
CONCLUSIONS
It is difficult to adapt modern conceptions of entrepreneurship to ancient Near Eastern
economies. Economics at the time was the management of the house, houses being either
temples, the houses of Gods, or palaces, houses of Kings. The rationality governing the
administration of families, cities, satrapies and kingdoms centered on a concept of equilibrium
granted by the justice imposed by Gods upon their earthly administrators. In such a conception of
the world individual gain was no end to individual or social economic action. Although the general
welfare of society was a sign of God’s favor, personal wealth accumulation was condemned or
even despised.
Organizational or historical theories concerning modern businesses can shed light on the
formation and the functioning of ancient Near Eastern bureaucracies, first in temples then in
palaces; bearing in mind, though, that the palace economy was mainly based on power exchanges
and not on market exchanges.
The concept of entrepreneur, instead, as born during the process of industrialization, is too much
tied to modernity to be applied in antiquity, but some of the spirit of Near Eastern seafaring
merchants and conquering kings lives on in modern entrepreneurs, in their capacity to incessantly
overcome limits and boundaries in search of resources and knowledge.
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