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A large and growing literature on “endogenous” institutions seeks to understand the circumstances under which institutions of particular types arise. One of the literature’s guiding principles is that, because institutions structure the incentives that members of a society face, if institutions are not well matched to a society’s circumstances—that is to say, not designed to inspire productive activities, broadly defined—the society will not thrive. We will discuss how this approach can help modern scholars understand the institutions of the Roman Empire, a society that clearly did thrive. The focus of this paper will be on the Roman imperial government’s policies that promoted the private ownership of land. These policies were crucial to the efforts of the Roman imperial government to create a class of landowners in the cities across the empire who would share in the burdens of ruling the empire. However, the extent to which landowners could dispose of their properties freely was limited by the overall constraints of an ancient agrarian economy and the fiscal requirements of the Roman state.

In 200 BC, the population of the city of Rome was 200,000. By AD 50, this figure had increased fivefold, an unprecedented burst of urban expansion. Moses Finley’s much-contested thesis that Rome was parasitic implies that the city’s growth could only have brought discomfort to the peoples of the Mediterranean. Drawing on the theory of cities developed by urban economists, I contest Finley’s thesis. Rome’s growth fostered specialization of labor and the sharing of information, enabling the city to export the Pax Romana, government, law, literature, and other beneficial services. The institutional foundations that undergirded the growth of Rome included norms and laws favoring brisk commerce in land. A provision of the Twelve Tables of c.450 BC, for example, authorized complete freedom of testation, an extraordinary principle in a near-archaic society. Also conducive was Rome’s adroit mix of a private sector that provided goods such as the apartment blocks that housed most of the population, and a public sector that provided essential public goods such as aqueducts. These institutional choices, along with Rome’s aversion to growth-limiting populist policies, were necessary, but not sufficient, conditions for its emergence as the largest city the world had seen.

This chapter serves as an introduction to the essays in this collection by exploring the ways in which contemporary economic theory can be used to ask new questions about the law and economies of ancient societies. The chapter begins with a review of the importance of Roman law as an academic discipline to legal historians. It then introduces the overall theme of the collection by reviewing the ways in which historians of the ancient economy and of ancient law have made use of economic theory to understand better the relationship between law and the economy in the Roman world. The chapter then goes on to discuss the individual chapters in this volume. It focuses in particular on the ways in which economic theory informs the approaches that the authors, both legal and economic historians, take in their essays. The chapter will thus set the individual chapters in a broader scholarly perspective and will seek to explain why economic methods are a fruitful way to understand Roman Law and Roman economic history.

The constitution of the Roman Republic featured a system of checks and balances that would eventually influence the American founders, yet it was very different from the system of separation of powers that the founders created. The Roman senate gave advice but did not legislate; the people voted directly on bills and appointments in popular assemblies; and a group of magistrates, led by a pair of consuls, proposed bills, brought prosecutions, served as judges, led military forces, and performed other governmental functions. This chapter analyzes the Roman constitution from the perspective of agency theory, and argues that the extensive checks and balances, which were intended to prevent the recurrence of monarchy, may have gone too far. Suitable for an earlier period in which the population was small and the political class was homogenous, the constitution proved unworkable when Rome acquired a vast, diverse empire. The lessons of Roman constitutionalism for the American constitution are also discussed.

This chapter provides a broad overview of the chapters in the second volume of Roman Law and Economics. The subjects addressed in this volume include slavery and the Roman economy credit, property, dispute resolutions, and remedies, and finally wrongdoing and Roman law. The focus of my discussion is on the role that economic theory plays in the work of the various authors, who represent ancient historians, scholars of Roman law, lawyers, and economists. The chapter will provide a perspective on the contents of the book as a whole and will seek to explain why economic methods are a fruitful way to understand Roman law.

When the Law of the Twelve Tables was promulgated, the Roman economy was overwhelmingly agricultural. As social and economic conditions became more complicated, the formalistic law of early republican times no longer sufficed. The rise of the ius honorarium can be seen as a response to these new circumstances. While scholars have tended to assign all important developments to the praetors of the second and first centuries BC, at least some important changes in the law took place earlier. The bigger picture that emerges is that, contrary to the tenets of institutionalism, Roman law developed pari passu with the economy. Roman law functioned as an autonomous discipline, governed by its own rules and principles. Law-making magistrates and jurists certainly responded to new juridical challenges created by the emergence of an increasingly sophisticated economy, but their principal aim was not to create legal rules that were conducive to economic development or growth but to find practical solutions to juridical problems created by economic developments. Finally, the Principate, to which a large proportion of the surviving evidence belongs, saw far fewer legal innovations than the last centuries of the Republic. The explanation must be that there was less need for legal innovation because most of the economic developments creating a need for new legal remedies had already taken place. Ironically, the period in which the pace of legal change had slowed down has produced most of the surviving evidence.

There is a very close relationship between the development of the Roman legal system, grounded on the activity of the jurists, and the creation of an imperial network of commercial relationships in the Mediterranean Sea. We can see this in the late Republic, between the end of the third Punic War and the Augustan age—when Roman legal thinking transforms itself in a scientific knowledge, connected with the development of a world power. An essential feature of this society was slavery, as slaves played a crucial role in many aspects of the economy. During this period, Roman law created contracts and remedies essential to commerce, and so in many ways anticipated the commercial development of the modern world. But rather than defining commercial relations in such a way as to exclude slavery, Roman law reinforced the central role of slavery in Roman society.

Roman slaves often had to meet expressly negotiated conditions to obtain their freedom. The use of such conditions helps to explain why the Romans freed so many slaves. They are an expression of the economic considerations that underlie the extraction and manumission model of Roman slavery. Agreements between masters and slaves occurred in practice and were recognized at law. Conditions could be set among the living or by testament and could consist of settling accounts, money payments, or services in kind; some followed the slave and were actionable. The money to pay for freedom often came from the slave’s patrimony or peculium. Though evidence is scarce, conditions and the corresponding manumission prices seem to have been of a type that could be met within years rather than decades. Extracting a price from slaves for their freedom lessened the future claims of patrons. For a certain type of slave, negotiated manumission conditions may have been the norm.

This chapter analyses the mainly juridical evidence (from the Digest and the late antique Codes, as well as Cassiodorus’ Variae) on the working of the market in the Roman Empire and the role played by the imperial authority in regulating it, in the light of the conceptualizations of the new institutional economics. This evidence seems to suggest undeniably not only that the economy of the Roman Empire, from its very beginning in the late Republic to late antiquity, was characterized by the free market, but also that maintaining competitive markets was the consistent and deliberate policy of the Roman authority throughout the whole of Roman history.

This chapter uses new data to extend the argument that there was an integrated wheat market in the late Roman Republic and early Roman Empire. I explore the meaning of randomness when data are scarce, and I investigate how we recreate the nature of ancient societies by asking new questions that stimulate the discovery of more information. The case for a prosperous Roman society extending the length of the Mediterranean Sea is strong. This chapter draws on and extends work reported in my book: The Roman Market Economy (2013).

This chapter analyzes ancient Rome’s law of business entities from the perspective of asset partitioning, the delimiting of creditor collection rights based on the distinction between business assets and personal assets. Asset partitioning, which is an essential legal attribute of modern business forms such as the partnership and the business corporation, reduces borrowing costs by simplifying credit-risk assessment and expediting insolvency proceedings. The chapter finds that ancient Roman business arrangements, such as the societas and the slave-run business endowed by the slaveowner with a peculium, did not give business creditors the first claim to business assets, making these forms of organization non-entities according to the criterion of asset partitioning. It appears that the only true legal entity used to form profit-seeking firms was the societas publicanorum, which roughly resembled the modern limited partnership. But use of that form was generally confined to firms that provided public services under contract with the state. Moreover, the societas publicanorum was essentially a creature of the Republic, and was largely abandoned during the Empire. Although Rome had a complex economy and sophisticated commercial law, and was familiar with most of the types of asset partitioning seen in modern legal systems, it ultimately failed to develop legal entities for general use in commerce. Apparent reasons include the Roman aristocracy’s disparagement of commerce, the emperors’ wariness of strong organizations outside the state, and the society’s continuing reliance on the family—a durable and complex legal entity in its own right—to handle many commercial needs.