The pyramids, central planning and capitalism

Three or four millenia before anyone ever thought of the word capitalism the ancient Egyptians built the pyramids using an economic system which was probably closer to the Soviet’s central planning than American “capitalism”.

This blogger has just finished reading A history of Ancient Egypt from the First Farmers to the Great Pyramid (2012) by John Romer and found several points of interest.

It is amazing how much archeologists can tell about ancient Peoples but we also have to realize that we know very little about them.  Romer points out that some good stories have been told about ancients on very little evidence and that often the stories tell more about the authors than the ancients.  My speculation about Soviet style central planning may be an example.

Probably the most significant thing is there is no evidence of money.  The building of the pyramids involved up to forty or fifty thousand people, about ten percent of the working population.  This must have  involved a lot of planning and coordination.

Money and decision-making may be an issue here.  I am wondering if the pyramids could have been built if the ancient Egyptians had money.  Money as we know it represents purchasing power and control over resources.  With money decisions are made by those people who hold the money and they may not always agree.  Who made the decision that the ancient Egyptian  agricultural surplus was going to be used to build pyramids?  Was it one person, was it a small group or did they have a society wide consensus. Unless human nature has changed a lot in four thousand years I doubt if it was the later.  I bet a lot of current national leaders, even  some from democratic countries, would love to have the decision-making power the Pharaohs may have had.

It could be that freedom is in part the right to decide what to do with one’s share of the agricultural surplus and money is an important part of that freedom.  If you have money you have control over some resources. The more people who have money the more spread out is the decision-making and the greater variety of decisions.

Without money there would have been no saving as we think of it.  There was probably some storage of food and maybe some stockpiling of materials for construction but most of the work would have been done with current production and was dependent upon the agricultural surplus which allowed food for the construction workers.  This probably also applies to our own economy where a huge agricultural surplus allows most of us to work on other projects.

While working on the draft of this post I read this article in The Economist about capitalism and inequality.  There appears to be an assumption that capital is something which can be accumulated.  Certainly a large manufacturing or construction project requires resources beyond those available to most individuals but after reading about the ancient Egyptians it is not clear that one can accumulate “capital” .  What is required is control over a quantity of current or very recent production (or agricultural surplus).  The capitalist gets this control by getting money (purchasing power) from others in the form of loans or investments.  Governments sometimes have the ability to get control over large chunks of current production

Economics is about relationships including the relationship between people and their government.  For ancient Egypt the archeological record has two pieces of evidence.  A number of hieroglyphics show tribute being brought to the leaders and there are also the pyramids.

I enjoyed reading about the ancient Egyptians but I probably would not enjoy living in a society where all or most of the agricultural surplus went to another person’s project – except perhaps if I didn.t know anything else.

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One Response

  1. Inspiring it was to read the comments on Ancient Egypt. It brings about some other examples ; very ancient – like Chinese Great Wall construction – and not so ancient – like Three Gorges Dam. The issue is: who has a power to accumulate the surplus and I do not think money is a crucial problem. Political power -direct one in autocratic organizations and indirect one in so called democracies. May be the first one is more transparent anyway ?

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