There’s not much doubt that the central issue of the 2016 elections will be wage stagnation and the shrinking middle class. Liberals have been itching for this fight for years, of course. But even conservatives are sounding like economic populists these days—Republicans “are and should be the party of the 47 percent,” declared Senator Ted Cruz in late April.
That both parties are focused on addressing the same big Kahuna of economic problems is certainly a good thing. We desperately need a contest of ideas, even if some of the solutions being offered, especially on the GOP side, seem absurdly ill-matched to the problem. (A flat tax? Really?)
But in the back of many people’s minds, certainly mine, is the fear that maybe there aren’t solutions to this problem. Maybe the great American middle class is just not coming back. We are now six years into an economic recovery that has seen next to zero wage growth. As Monica Potts shows in this issue’s cover story (“The Post-Ownership Society,”), even highly educated Millennials in booming Washington, D.C., are having a hard time seeing a path to middle-class financial stability. Millennials generally are also finding it difficult to start businesses, despite their eagerness to do so (see “The Lost Entrepreneurial Generation?” by Matt Connolly), or to buy homes, with some exceptions (see “The Young and the Rentless” by Jordan Fraade). The mass downward mobility Millennials are experiencing is not a new phenomenon, either. As Phillip Longman documents (“Wealth and Generations”), every generation born after 1953 has done less well than the one that preceded it.
Looking back at that record, and looking forward, to an economy where globalization and computer algorithms continue to eat away at middle-class jobs while Thomas Piketty’s famous equation “r > g” (returns on capital exceed economic growth) continues to favor the rich, it’s hard to be optimistic. Sure, generational upward mobility was a defining reality for most of American history. But all good things come to an end, right? Perhaps two centuries of egalitarian prosperity is about all a democracy can sustain.
If that dark vision haunts you, as it does me, then a new book, The Rise and Fall of Classical Greece, by the Stanford classicist Josiah Ober, is worth taking note of. Most of us know, or learned in school, about the astonishing cultural and political contributions of ancient Greece, from the development of democracy to fundamental advances in philosophy, math, medicine, theater, architecture, and other human endeavors. What few people outside of a tiny corner of academia are aware of, and the subject of Ober’s book, is an equally astonishing Greek achievement: broad-based economic growth, which lasted (with periodic interruptions) some five centuries, from roughly 800 BC to 300 BC, and possibly longer.
The image of ancient Greece that comes down to us from history is not one of great wealth. “Hellas has always had poverty as its companion,” wrote Herodotus in the fifth century BC, quoting a deposed king of Sparta conversing with Xerxes, the Great King of Persia. Greeks at the time generally contrasted their own simple food and lifestyles with the lavishness of the Persians and other civilizations they knew. The very word “Spartan” today conveys a lack of worldly comforts.Â The early-twentieth-century British classicist and political scientist Alfred Zimmern summed up the standard modern view of classical Greece thusly: “The pioneers who created our European civilization were stricken with poverty all of their days.”
But fresh archeological discoveries and scholarship, to which Ober is a leading contributor, are challenging that view. The emerging new story goes like this: In 800 BC, as the Greek world emerged from the Dark Age that followed the collapse of the Mycenaean civilization chronicled by Homer, typical Greeks were indeed impoverished. Like most ancient people everywhere, they lived at close to the subsistence level, in tiny, ill-constructed homes mostly in villages.
Over the course of the next five centuries, everyday life was transformed. Population levels increased ten- to twentyfold, depending on how you count (for instance, whether Greek colonies are included). By the fourth century BC, a third of Greeks were living in about 1,000 independently governed cities, or poleis, of various sizes. That’s twice the level of urbanization that the Roman world would achieve at its peak and one England and Wales would not reach until the beginning of the nineteenth century AD.
Yet instead of Malthusian catastrophe, this rapid growth in Greek population and city dwelling was accompanied by increasing living standards. Archeological excavations show that the square footage of Greek homes grew 350 percent, and the quality of building materials improved dramatically. Skeletal remains indicate that average life expectancy for Greeks who survived childhood grew by roughly a third. Hoards of ancient coins unearthed in modern times provide another measure of economic well-being, a sort of rough savings rate. According to Ober, there are twice as many coin hoards from the fourth century BC as from the fifth (coinage was broadly introduced in the sixth century), and those from the fourth century have twice as many coins per hoard.
Overall, according to calculations by Ober’s Stanford colleague Ian Morris, per capita consumption in ancient Greece grew somewhere between 50 percent and 95 percent from 800 to 300 BC. That works out to an annual per capita growth rate of between .07 and .14 percent. Ober makes the case that the upper range of that estimate is more likely. If so, Greece’s per capita growth rate exceeded Rome’s and would not be matched again until the rise of Holland in the sixteenth century AD.
Of course, lots of other civilizations during this period—Egypt, Persia, Carthage—were wealthy, too. The difference was in the distribution. Though we lack the kinds of detailed economic records for these societies that we have for Greece and Rome, everything we know about them suggests that their wealth was overwhelmingly controlled by a narrow elite who lived in splendor while the masses living meagerly.
Not so in the Greek world. Home sizes, again, give an indication. Greek settlements “were never characterized by a few mansions and many huts,” Ober writes, but instead were clustered tightly around a mean size, and over time their size grew in lockstep. By 300 BC, he writes, “houses in the 75th percentile of the distribution were only about one fifth again … as large as those in the 25th percentile.”
Greece was far from a classless society. Ober cites the work of Geoffrey Kron of the University of Victoria, who looked at census reports for Athens in 322 BC and other records and calculates that the richest 1 percent of that city’s population owned about 30 percent of all private wealth, with the top 10 percent owning 60 percent. From there, Kron derives a Gini index—the standard measure of inequality—for Athens of 0.708. That is roughly comparable to the United States in 1953-54. To the extent, then, that America was a middle-class society in the 1950s, so too, apparently, was ancient Greece.
Even the lower classes lived reasonably well. Ober calculates that skilled and unskilled laborers in Athens in the 320s BC were earning wages “sufficient to elevate them to a decent, middling pre-modern standard of living,” which was well above the subsistence level. Rome, despite its far greater overall wealth and power, would never achieve this broad prosperity.
How did ancient Greece pull this off? Geography didn’t hurt. With its extensive seacoasts and location between the rich markets of the Middle East, western Europe, and North Africa, Greece was well positioned to be a commercial hub. Yet the Greek mainland never again saw such high rates of economic growth after it fell to Roman rule in the second century BC despite its advantageous location. Greeks also employed slaves, which obviously boosted their economy. But slavery was widely practiced in other ancient societies without achieving broad prosperity for non-slaves. Some large cities, like Athens, extracted tribute from weaker states. But Athens flourished economically long after it lost its imperial power.
What ultimately explains Greece’s amazing economic performance, argues Ober, was its political institutions. Though not all poleis were democracies—some were tyrannies, others oligarchies—all were characterized by what Ober calls “rule egalitarianism.” Native male citizens had rights, which even tyrants were loath to challenge lest those male citizens refuse to fight in the phalanx, the military formations that defended cities from threats. These rights included security for themselves, their families, and their property, and equal access to and standing in public institutions like courts and marketplaces.
This equality of public standing, in turn, had positive spillover effects. It created higher levels of public trust, lower transaction costs, and incentives for citizens to coordinate, share information, learn new skills, and take calculated entrepreneurial risks. The result, Ober argues, is that the Greek economy became increasingly specialized, long before Adam Smith documented the economic benefits of specialization. Greek poleis became adept at exporting processed goods (wine, olive oil, fine pottery, warships) as well as services (architects, tutors, mercenaries) to each other and to other societies and at importing what they didn’t have enough of (grain, timber, skilled workers).
Fierce competition among the poleis also spurred innovation. Some was technological—the Greeks invented oil lamps and terra-cotta roof tiles, among other things. But the Greeks’ real genius was for institutional innovation, the tweaking of rules and building of systems to make public interactions fairer and more productive. My favorite example from the book is how the Athenians, eager to keep their city the preeminent place to do business, provided traders, native and foreign alike, with free access to public officials who were expert at detecting fraudulent coins.
How accurate is Ober’s analysis of the ancient Greek economy? Beats me; I’m a dilettante on the subject. (For a more knowledgeable assessment, check out the online review of the book by Temple University’s Daniel Tompkins at washingtonmonthly.com.) What I do know is that it is the height of intellectual irresponsibility to draw direct lessons for today from histories like this of distant civilizations that are so different from our own. But come on; there’s no way I’m not going to do that in this case. I will, however, try to be bipartisan about it.
One lesson conservatives will like is that Greece achieved its amazing mass prosperity with no interference from some distant, centralized government. Each city-state set its own policies, often within voluntary alliances of other city-states.
A couple other lessons liberals will like. First, the most democratic and economically successful poleis kept taxes on average citizens low and put heavy burdens on the rich, through both direct taxation and strong social pressure on the wealthy to make “gifts” to the commonweal, like building warships. Second, these poleis also had extensive social programs, from grain price stabilization to welfare for invalids to state support for the widows and orphans of those who died in war. These programs were crucial, Ober says, in incentivizing citizens to take calculated risks for their own and the community’s benefit.
The final lesson is one I think both sides will welcome. It is this: If Americans can leverage the inherent power of their own citizenship, as the ancient Greeks did, to create public institutions and market rules that advantage everyone, it’s possible that we can keep this middle-class thing going for a few more centuries.