Edward E. Cohen is best known to ancient historians for a short monograph entitled Ancient Athenian Maritime Courts that appeared in 1973 (Princeton). Cohen embodies a role of traditional relevance in research on classical antiquity, but one that is increasingly a rarity: he is a “man of affairs” who brings his practical, professional experience to bear on his historical research. Although he received a doctorate in Classics from Princeton, he has made his living (and achieved to all appearances considerable success) in banking rather than in academic life. Edward Cohen has now given us a very fine book on ancient banking, a work that has been well worth the wait. The configuration of the evidence entails that any contextualized treatment of ancient banking must focus on fourth-century Athenian banking, a happenstance that has the effect, on the one hand, of concentrating the analysis, but, on the other, of risking an engendering of discontinuities with the scattered non-Athenian data on the classical economy and on banking in particular.
Interpretations of banking in classical Athens are enmeshed in the controversies surrounding the characterizations of the Attic economy, which involve evaluations of its affinities, respectively, with modern, market economies and with more primitive, subsistence economies. This debate, which has already seen its centennial, has pitted against each other two perspectives, that of the so-called modernists and that of the primitivists. Marxism has played a baleful role in these polemics by fostering attempts to segregate classical economic organization as a servile stage (analyzable only on its own terms) on the way to capitalism. The Marxist interpretation of the classical economy is naturally a type of primitivist reconstruction. Yet, other non-Marxist (and less ideological) primitivist scholarship has also influenced treatments of ancient banking. Therefore, it will be necessary to specify carefully the sequence of Cohen’s arguments, inasmuch as the evidence on banking can lead to startlingly different conclusions as the basic perspective of individual scholars varies. It deserves noting at the very outset that a parallel work which came to many diametrically opposed solutions appeared in 1991: Paul Millett, Lending and Borrowing in Ancient Athens (Cambridge).
After a preface containing some brief remarks on methodology (for more on which see below), the first chapter attempts to establish Athenian banking within the setting of a market economy. The definition of a bank deserves noting at the outset: it is a private business that accepted deposits both with an absolute obligation to repay and the freedom to profit from their use in loans and investments. Ancient trapezai‘banks’ satisfy the essential (including modern legal, stipulatory) qualifications to be considered banks. Significantly, in contrast to M.I. Finley, Cohen holds that banks provided mechanisms for the creation of “bank money” that supplemented the official “commodity money” in precious metals. I should signal caution here on one point, namely that the bankers’ activities had any substantial impact on the money supply (cf. pp. 13-14). We lack sufficient evidence for judging.
Trapezitic banks which emerged from ( n.b. : and transcended) money-changing typified the elements of the economy that were detached from traditional social relationships. For all their participation in “advanced” economic functions, these banks also belonged to a hidden, invisible sector of the economy. Here Cohen is one of the first to recognize the impact of tax avoidance. I would have emphasized the influence of this factor even more for this period (the fourth century) in which personal impoverishment and declining output for the economy of the whole community were the results of nearly continuous total war (see also below).
Cohen’s second chapter explores what he considers the misleading results of an application of quantitative or cliometric analysis (cf. also “Flawed Cliometrics” in “Banking Operations” on pp. 170-83). There is much subjectivity in compiling the dossiers of examples to be compared, e.g. that of the cases contributing to a calculation of the relative proportions of productive loans and of those made for consumption. An investigation of forensic evidence provides markedly different results: although it concerns seemingly unique situations, the description of their circumstances entails the widespread existence of certain financial practices that are poorly attested. Cohen offers as examples the loan of Pasion to Philondas and Timotheos for the shipment of timber ([Dem.] 49.35-36), the series of loans of Pasion to a prominent businessman of the Bosporan kingdom (detailed in Isoc. 17), and a loan of Herakleides to the naukleros Apatourios so that he could disencumber his vessel ([Dem.] 33).
Next Cohen discusses the financial context for Attic bankers, emphasizing the differences of their operations from those classified under modern categories. He particularly cites the two complementary, polar financial modes for Attic lending, one maritime and the other internal with (respectively) their tokos nautikos‘maritime yield’ and tokos engeios‘landed yield’, where only the latter is strongly affected by factors of time. Their action lay within “a cultural and commercial universe molded by societal concepts and business realities; an Attic Weltanschauung continually being fabricated by the actuality of fourth-century, eastern Mediterranaean, Hellenic living.” Regardless of the influence of social norms, the autonomy from governmental oversight possessed by bankers was noteworthy. There follows a fine summary of the transaction-driven yields associated with maritime lending.
The subject of Chapter Four is the predominant role of wives and slaves in the life of Attic bankers several sections of the chapter provide full documentation (73-84, 101-10)—which Cohen traces to an absence of suitable salaried agents. Banks and bankers were after all equated in common perception and in law, and personal and bank funds were commingled. The physical assets of banks were insignificant when compared to the value of the skills and experience of the banker and his dependents. Thus, special attention deserves to be given to the distinctive style of succession in control of banks wherein slaves (perhaps even in preference to a son, as in the case of Apollodoros) took over from their masters, sometimes marrying that master’s widow or daughter. The bank was a specialized adaptation of the oikos ‘household’, an institution very prominent in the pre-Peloponnesian War economy. Thereupon, the limited liability of masters, the ability of slaves to be parties to litigation, and the role for citizens as agents of slave bankers are topics that Cohen next discusses. A similar deliberate flexibility may have surrounded the civic status of the wives of bankers (as shown for Archippe, the wife of Pasion and Phormion successively), with concomitant ramifications for their control of property.
Cohen’s fifth and longest chapter deals with banking operations. The discussion sensibly starts from the nature of the parakatathekai‘deposits’ which were held under flexible terms, but, according to Cohen in a controversial conclusion, were nonetheless returnable on demand. Next for consideration are the reasons why the deposits were made, such as tax avoidance, a desire for confidential dealings, the creation of collateral, facilitating transactions, and the possibility for the transfer of funds. Turning to the utilization of funds by bankers, the author starts with another controversial judgment in concluding that banks participated in investment in commerce. He initially bases himself on an investigation of the inheritances of Demosthenes and Apollodoros (the latter, less probable, to my mind; cf. Dem. 36.4-6). He sees the list of loans in Dem. 27.9-11 as maritime loans mediated through bankers (opposing R. Bogaert). An appraisal of the rest of the evidence includes a discussion of the role of calculating risk in maritime lending. The topic of risk-taking in ancient Greece—be the risks economic or political—constitutes a virtual terra incognita for ancient historians so that Cohen’s remarks here, albeit narrowly focused, are most welcome. He conducts a sustained polemic against the consensus holding against bank financing of maritime loans, represented here to a large extent by its most recent representatives, R. Bogaert and P. Millett. All the available cases are evaluated for the presence or absence of maritime lending. The chapter closes with a brief description of a thoroughly obscure topic, the status and usage of a banker’s personal capital.
Chapter Six, closing out the volume, is entitled “The Bank’s Role in the Economy”. It starts by squarely confronting the thorny issue of the supposed lack of an economic consciousness in the fourth-century Athenian. Banking belonged to the invisible economy—financial assets were aphanes—which Cohen, following the lead of work on contemporary “parallel” or “black” economies, views as playing a critical, constructive role. The invisible economy buffered the affluent from the heavy burden of taxation caused by liturgies and eisphorai. Some students of Athenian lending (such as Millett) have set the eranos loan, a good-will collective loan from friends, as a foil to bank lending: its prominence dramatizes the continued existence of an embedded economy and the primacy of communally-oriented behavior over market-oriented behavior. Cohen, however, argues that eranos loans were part of a single matrix of lending with bank loans, and they could carry interest and lead to litigation like other types of lending in the setting of a price-establishing market. A final discussion deals with bank failures which were owed (according to the author) to the inherent vulnerabilities of a business with a high exposure to risks. The alternative view that such failures arose from general waves of economic crisis is supported by very scant data. While I applaud Cohen’s skepticism toward the “crisis” analysis that is a hallmark of primitivist and ideological interpretations of ancient economic life, I would respectfully suggest that individual business difficulties are likely to have interacted with politically-grounded shifts in Aegean commerce in the failing of fourth-century banks.
This work makes an excellent start toward a new appreciation of the extraordinary ascendency in business of the leading bankers. Dealing with a bank put the citizen beyond the realm of the public, “visible” economy; indeed, its attractions largely lay in its confidentiality and its immunity from taxation and litigation. Hence the trust that a banker inspired, perhaps as much as his business acumen, was a tremendous asset, and it may be that even a slight difference in public perception of trustworthiness had enormous ramifications for the size and the profitability of an individual bank. Thus, the slave who worked at the side of his master and was seen repeatedly to deserve such confidence (like Pasion or Phormion) was the presumptive heir to the bank regardless of the legal difficulties which that succession entailed. The social and political persona of an heir like Apollodoros, the son of Pasion, may have been too complex, too ambiguous to prospective business partners to permit an intergenerational family bank, and that will have had results for classical banking that we cannot yet fully appraise.
Cohen’s results are admittedly impressive, but it is also necessary to acknowledge that he must utilize a relatively few attestations of banking activity again and again for the unique light that they shed. One situation invoked repeatedly is the account of the misadventures of the Bosporan merchant in Isoc. 17. The plot of the Hellenotamiai in schol. Dem. 24.16 establishes several crucial points, and the loans connected with the ransoming of Nikostratos in Dem. 53 are pressed for what they can tell us. Thus, we ought not to relinquish substantial sympathy for those like Millett who call our attention to the number of cases that reveal more personalized, more “embedded” aspects of fourth-century economic behavior.
I should juxtapose this insight with the following point. The necessarily Athenian emphasis of the analysis can lead to a fallacious generalization. It may be sensible to speak of the emergence of a market economy in Athens (for the first time) in the late fifth (I should stress) and fourth centuries, but the possibility should not be forgotten that other cities had earlier (or more thoroughly) achieved an equal or even greater level of economic and financial sophistication and, in addition, that the more advanced features of the Athenian economy were assimilated from abroad or introduced by immigrants during the heyday of the empire. In other words, we cannot determine whether the testimonia on banking merely bespeak the intermediate character of the classical Attic economy, possessing correspondences not only with an agrarian subsistence economy, but also with a more differentiated and entrepreneurial market economy. Or is it possible that the unique blend of primitive and advanced features of fourth-century economic behavior are another product of the political economy of fifth-century Athens? Athenian hegemony caused the grafting of a commercial and entrepreneurial economic component on an economy that had previously mixed agriculture and mining with craft activity. That dominance and its achievement had augmented the capital of elite Athenians through the profits of empire. Hence the mixture of primitive and more advanced features in Athenian lending and borrowing was marked, perhaps even incongruous.
The segregation of entrepreneurial activity in an alternative economy, where it was relatively immune from taxation, may have constituted another perquisite of elite status among the citizens of a hegemonic state. If that is so, fourth-century Athenians may have continued to pay for this “invisible” financial activity that had contributed to the affluence of their fifth-century predecessors, by lower revenues, by less ability to supervise banking and commerce, and (most significantly) by a limitation of the benefits of a thorough penetration of the most advanced contemporary financial and commercial practices (which Cohen has analysed so well) into the other sectors of the economy.
The important methodological lesson of this work cannot be over emphasized. There are bound to exist significant arguments over the appraisal of the complexity and differentiation of economic institutions in antiquity, as there will exist disagreements about the capacity of the ancients to articulate their understanding of economic phenomena. Nonetheless, this work serves as a powerful demonstration how the lessons of economic research based on other periods and even on a study of modern behavior can elucidate the activities of ancient economic agents. As Cohen observes, “as with other fundamental human drives and functions, the Athenian dealt with monetary enrichment and poverty, trade and profit in ways that reflect fundamental human responses and motivations and these can be as clear to us as other culturally transferable human drives, emotions, and acts that we encounter in Greek literature, mythology, and art. The fundamental processes of money-lending, deposit gathering, and currency exchange generate human responses to materialistic advantage” (p. xi).