Lessons On Economic Freedom From Ancient Greece

Economic freedom isn't a modern invention. Throughout history, we find time and time again that those areas with the most economic freedom were the most prosperous. Activists in favor of economic freedom often limit themselves, however, to only a few times and places, and most lean on modern studies showing the benefits of the marketplace. It is possible to take a broader view, however, and market defenders could strengthen their argument by revisiting the larger historical track record of economic freedom. 

Recent research shows that ancient Greece, for example, prospered during periods of economic freedom:

Andreas Bergh and Carl Hampus Lyttkens in “Measuring Institutional Quality in Ancient Athens,” argue that economic freedom in ancient Athens was comparable to highly ranked modern economies such as Hong Kong and Singapore. The authors note that well-defined property rights, freedom to trade, and light regulations conducted an environment where commerce could thrive, thereby improving living standards. Due to the absence of draconian regulations, Athenians were able to freely experiment without a high degree of government opposition. Although Bergh and Lyttkens admit the limitations of their study, they nonetheless aver that economic freedom played a pivotal role in the success of ancient Athens: “We suggest that we may have uncovered one of the mechanisms through which democracy affects the material and cultural success of Athens.”

Furthermore, George Bitros and Anastassios Karayiannis in their article “Morality, Institutions and Economic Growth: Lessons from Ancient Greece” attribute the economic prowess of Athens to freedom in market institutions:

The Athenian economy in the 5th century BC functioned much like a modern market economy….Economic agents acted upon prices determined from the mechanism of demand and supply and aimed at getting the best value for their efforts….Trade disputes were resolved through an efficient legal system and arbitration.

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