Abstract
Ancient Athens enacted what can be considered an early form of competition law in which grain retailers were banned from certain activities. The conventional understanding is that Athens was attempting to prevent grain hoarding. Careful analysis of the Athenian sources, however, suggests that the ban did not involve hoarding and addressed only the act of buying large quantities of grain. Athens may have been motivated to enact such a ban for a couple of reasons: 1) a perception that retailers violated moral concerns by raising prices and 2) pressure from more powerful groups to reduce the capabilities of the retailers. Grain storage was an important method of managing the city’s food supply, so Athens may not have wanted to ban hoarding. This resembles the modern notion that commercial behavior should not be banned if doing so will impede beneficial activities.
Keywords
I. Banned Business Practices in Ancient Athens
Early in the fourth century before the common era (BCE), a group of merchants were accused of exploiting conditions in Athens’ grain market. Charged with violating a law banning certain practices, the grain dealers faced potential death sentences. The relevant law has been understood as an early form of competition regulation. 1
Our sole source of knowledge for the law is a speech the orator Lysias prepared for an unnamed individual (the “speaker”) to deliver at a public trial (Speech 22). Beyond the vague accusations in the speech, however, the details are obscure. Both the law and the activity that allegedly violated it remain unclear. We also do not know whether the prosecution was successful or what punishment may have been imposed. Properly understanding the events described in Lysias 22 will enable us to recognize whether the Athenian law resembled any aspects of modern competition law or shared any theories and principles.
This article seeks to understand what the law was designed to achieve and why it was passed. The accusations from Lysias 22 will be described in Part II. Part III discusses what activity was actually banned. Part IV looks at difficulties in prior interpretations of the motivation behind the law, and Part V proposes a different approach. Part VI will examine why Athens banned only specific forms of conduct.
II. The Accusations Against the Grain Dealers
In Lysias 22, called “Against the Grain Dealers,” 2 the speaker alleged that the eponymous grain dealers (sitopolai) violated a law regulating how much grain they could purchase. The law forbade “any of the inhabitants of the city to buy together more than fifty phormoi of grain,” and the grain dealers had defied the ban. 3 The violation was apparently so severe that the speaker urged the jury to sentence the grain dealers to death. 4
When the grain dealers spoke up in their own defense, they did not deny committing the alleged conduct. But they claimed that they did so following the orders of public officials. 5 Seizing on their statement, the speaker argued that this apparent admission should suffice to prove that the defendants violated the law. 6
The speaker argued further “that my opponents are lying about the officials as well.” 7 He summoned the grain guardians (sitophylakes), or overseers, who denied that they had ordered the dealers to do so. One overseer named Anytus, however, admitted to instructing the dealers regarding grain purchases but not as the dealers claimed. “When grain was expensive with the defendants bidding against each other and contending among themselves, he had advised them to stop competing, in the belief that their buying it at the best price possible would benefit…their future consumers.” 8 It seems that the grain dealers were driving up the retail price of grain by bidding against one another when purchasing grain from importers.
The speaker mentions that once the dealers purchased grain, they were not able to raise the retail price; they were allowed to sell at a markup of just one obol. 9 But the dealers had managed to inappropriately increase the price of grain. Anytus had directed the grain dealers to cease bidding against one another but had not told them “to buy together and hoard the grain.” 10
III. Ban on “Buying Together” Even Without Price Increase
The speaker does not spell out precisely what the retailers were forbidden to do. Scholars disagree on how to interpret the term “buying together” (sunoneisthai). Under one reading, the law was a ban on hoarding grain. 11 Thus, “buying together” refers to an individual who buys at one time large amounts of grain. Others, however, interpret “buying together” to refer to multiple buyers who collaborate and form a cartel of buyers. 12 The Greek prefix sun- (“together”) could plausibly be understood to refer to either the grain or the purchasers. 13
The difference between these interpretations regarding the content of the law is not large. Both of them agree that the law was designed to prevent the grain dealers from accumulating large quantities of grain. They differ only on whether the law prevented individuals from buying large amounts or merely cartels were prohibited from doing so. However, these interpretations seem to ignore that the law did not address accumulation of grain: it was not expressed as a ban on holding or storing this grain. Rather, the ban was on “buying together.” Even if the term refers to buying lots of grain at the same time, it was a prohibition on methods of buying, not “hoarding,” which is action taken after the grain is purchased.
The speaker’s description suggests that the law should be understood as a ban on purchasing large amounts even without subsequent price increases. 14 The prohibited act is thus “buying together,” whether it refers to an individual purchasing large amounts or a cartel purchasing. But the ban did not expressly ban accumulating or hoarding grain.
IV. Purpose of a Ban on “Buying Together”
The content of Athens’ ban on buying together does not explain what motivated Athenian authorities to impose the ban. This part will assess two related explanations discussed in the literature: that Athens was attempting to keep grain prices down and was attempting to ensure an adequate grain supply for the city. These theories, however, present some difficulties, and alternative explanations will be considered in the following part.
A. Price and Supply of Grain in Athens
At the time the ban was in effect, there was concern over the high price of grain in Athens. The concern can be seen in the overseer’s instruction that the grain dealers should not bid against each other. 15 Further, the speaker condemns the retailers for selling at high prices. 16
Athens’s supply of grain was likewise deemed vulnerable. This was a common concern in the ancient world. 17 Moreover, Athens in the fourth century was extremely susceptible to food crises and often experienced food shortages. 18 And because of anxiety over the grain supply, the grain trade was regulated in Athens more than any other commodity. 19 Whereas trading in the Athenian agora was subject to general market regulators (agoranomoi), the grain trade had its own special officials, who eventually outnumbered the general regulators. 20
The background to the speech “Against the Grain Dealers” probably lies in one of these shortages. 21 The speaker accused the retailers of benefiting from rumors “that your ships in the Pontus have been lost, that they have been captured by the Spartans while sailing out, that the trading ports have been blockaded, or that the truce is about to collapse.” 22 The speaker may be alluding to Sparta’s blockade of Athens’s grain route in 387 BCE, 23 which forced Athens to make concessions to the Spartans. 24
Even in a year when there was no grain shortage in Athens, anxiety over grain supply would probably have remained an important concern. And there may have been a perception that retailers were hoarding grain to drive the price up. At least one other Greek city enacted regulations—and threatened violators with a death penalty—to prevent hoarding. An inscription from the Greek city of Teos in about 470 BCE states that if anyone “forces up the price of imported grain, that man shall die, both himself and his family.” 25 To provoke such an extreme threat, concerns over hoarding were likely prevalent and pressing. 26
B. Difficulties with Understanding Ban as Motivated by Price and Supply
Although there were evidently concerns over both price and supply in Athens’ grain market, it is unlikely that the ban on “buying together” stemmed directly from these concerns for several reasons.
1. The law regulated only purchases from importers of grain but did not address purchases from other sources
In a normal year, Attica (the region including Athens and surrounding rural areas) produced domestically as much as half of the necessary grain supply. 27 Thus, the retailers’ interactions with the importers would have impacted only half or less of the grain supply. If there was concern that hoarding would lead to higher prices or reduced supply, the same concern should extend to purchases from sources other than the importers. The speaker could have built a stronger case by alleging similar behavior with regard to purchases from local producers. 28 But the ban seems to have encompassed only purchases from importers. 29 This suggests that maybe there was another concern that related only to interaction with the importers.
2. It is not clear how much the retailers could have impacted price
The retailers were limited in how much they could increase price. 30 It appears the retailers were allowed a markup of just one obol per unit regardless of the price the retailers paId. 31
The retailers were also unable to impact the supply of grain entering the market. In Demosthenes’s speech “Against Dionysodorus,” it appears that the importers were “working the retail grain market and manipulating prices.” 32 Suppliers in Athens would maintain contact with those abroad, “so that if grain was expensive here, they would send here, and if it was cheap, they would ship it to another market.” 33 Aristotle attests that once a grain ship docked at Athens’ port, the Peiraieus, it was banned from reexporting more than one third of its cargo, which further suggests that Athens addressed concerns over supply by regulating the importers. 34 The retailers, on the other hand, had to accept the price offered to them based on the supply currently available in the market. With the wholesale price determined by external factors, such as wars or inclement weather, the conduct of the retailers was most likely not an important factor.
If the retailers were to affect the price of grain, it would be by suppressing supply in the downstream market. In practice, the retailers would sell to millers, who would sell to bread sellers, who in turn supplied ordinary Athenians. 35 Retailers could presumably have withheld supply, which would eventually have led to increased prices to consumers. However, given that the retailers were unable to arbitrarily raise prices, it is unclear what they would gain by restricting Athens’ supply of grain.
The retailers may have wanted to hoard grain until prices rose, and they could then profit from the higher price. The speaker mentions the concern that the retailers “ought to have been selling at the same price for several days, until the stock they had bought together ran out.” 36 In fact, he alleged, they were selling at different prices on the same day “for a drachma more” per medimnos. 37 By claiming that each sale was from a separate stock, bought at different prices, the retailers would have been able to sell some grain at higher prices. 38 In this manner, the retailers would have been able to effectively increase grain prices.
However, if the objective was to prevent retailers from storing away grain, the activity of concealing grain should have been banned. 39 But, as discussed in Part III, the law regulated the purchase of grain and not what they did with the grain after the purchase. 40 In addition, if the ban was intended to prevent retailers from selling grain after the price rose, the speaker should have used such conduct as evidence that the retailers had violated the ban. The speaker instead used the argument to prove only that the retailers did not have the city’s best interests in mind. According to the speaker, the retailers had maintained “that they were buying the grain together out of goodwill towards the city, so that they could sell it to you as cheaply as possible.” 41 But it could not have been the case that the defendants were trying to help the city because then “they ought to have been selling at the same price for several days.” 42 The argument is thus used to disprove the retailers’ claim that they had the city’s best interests in mind, but not as evidence that they had broken the law in question. 43
Finally, it is unlikely that the grain dealers would have been able to conceal the amounts of grain that would cause a food crisis throughout the city. 44 And if consumers had trouble finding grain, knowing how much had been imported, it would have been obvious that someone in the middle, namely the retailers, was holding back the supply. 45
3. If the ban was intended to address concerns over price and supply, the retailers’ defense is inexplicable
Apparently, the retailers argued that they were instructed by the overseer to “buy together.” The overseer then testified that he instructed the retailers not to bid against each other, but “he did not tell them to buy together and hoard the grain.” 46 If the purpose of the law forbidding large purchases of grain was to prevent the retailers from hoarding, it is difficult to see why the retailers would have thought they were allowed to “buy together” in this case. The instruction was not to bid against each other because that year “grain was expensive” and the overseer wanted to keep the price of grain down. They should have understood that nothing in this instruction waived the existing law against buying large amounts, which was also designed to keep the price of grain down.
V. Political and Moral Reasons to Restrain Grain Dealers
Although there was likely little opportunity for retailers to significantly impact the price, the Athenian law may have been motivated by moral and political arguments. Two aspects can be identified. First, there may have a general perception in Athens that the grain dealers were not necessary, and therefore their ability to control the grain supply had to be curtailed. Second, this concern was coupled with the fact that the dealers were a disfavored group, forced to contend with more powerful political forces.
A. Concern That the Grain Dealers’ Activity Was Unjust
The principal duty of the overseers was, according to Aristotle, to see that grain reached the market at a just price. 47 The overseers were thus tasked with ensuring that the market operated under accepted moral standards. The overseers may have therefore enforced measures related to how the grain dealers affected price and supply. Even though it was unlikely that the dealers could have substantially impacted price or supply, the ban was implemented to prevent behavior perceived to be immoral, however small the effect.
The grain dealers were likely seen as middlemen who served only to drive up prices and whose activities would have been considered immoral speculation. 48 The speaker refers to this generally negative perception of the grain dealers: “The city has recognized the unscrupulousness and ill will of the defendants for so long that…you appoint Grain Guardians separately by lot to oversee this one single trade.” 49 Concern over unnecessary speculation would be especially contentious when the middlemen in question dealt in an essential commodity, such as grain. It would thus have been necessary to regulate this immoral activity.
The overseers’ attempts to enforce “moral” behavior in the grain market may have led them to enforce measures that seem puzzling and harmful, especially from a modern perspective. As Demosthenes was aware, the seafaring importers were attuned to price variations and would travel to locations with higher prices. When Anytus instructed the retailers not to bid against each in order to keep the price down, Athens would have become a less attractive destination for importers. The importers might have been induced not to come, and Athens could have suffered a shortage of grain. But the overseers were not troubled by this problem because their objective was to enforce moral behavior.
B. Political Status of the Dealers
It is still necessary to understand why the ban related to transactions with importers only and not other grain transactions. Perhaps the explanation can be found in the political context of Athens’ grain supply. The Athenian authorities may have been responding to pressure from groups that wanted to ensure the grain dealers did not acquire market power.
The grain dealers were metics, resident aliens in Athens. 50 This was evidently an important factor in the case, as the speaker begins by asking a defendant, “Tell me, are you a metic?” 51 The speaker then emphasizes that a metic was bound to obey the laws of the city. 52 The speaker thus immediately casts suspicion on the grain dealers’ motives and raises doubts whether they can be trusted to pursue the best interests of the city, 53 a suspicion that he will continue to exploit throughout the speech.
Even before presenting his case, the speaker assured the jury he was confident they would uphold the law and dispense justice. But in contrast to the jury’s adherence to the law, the grain dealers were asked whether they actually intend to obey the laws of the city. 54 Furthermore, by continually mentioning the laws of Athens, the speaker may have been implying that the grain dealers were strangers in the city. 55 And midway through the speech, the speaker appears to abandon legal arguments and engage in ruthless characterization of the grain dealers. 56
A general prejudice against metics would have been reinforced in the context of Athens’ grain supply. 57 As discussed above, the role of the grain dealers may have been seen as essentially that of speculators, who served only to drive up price. 58 The importance of the grain supply and recent shocks to the supply system that the speaker mentions would have made the grain dealers particularly suspect in this environment.
Aside from general suspicion of the grain dealers, the importers were a powerful group and would have been interested in the reducing the power of the grain dealers. 59 Importers brought grain to Athens from elsewhere, which made them indispensable to Athens’ food supply. Athens indeed implemented various measures to attract importers. 60
The contrast between the two groups is emphasized in the case against the dealers. Toward the end of the speech, the speaker refers favorably to “those who sail here with goods,” 61 that is, importers, and warns the jury that “if you acquit those who themselves acknowledge having collaborated against the import traders, you will yourselves be seen as plotting against the import traders.” 62 The speaker thus hints that the jury should be careful not to undermine the people who enabled Athens to meet its food needs.
The importers would have benefited from a reduction in the market power of the grain dealers. When the price of grain rose while the ships were in port at the Peiraieus, the importers would profit from the higher price. 63 If, however, the grain dealers were able to buy up the entire stock as soon as it arrived in port, the importers would lose the profit from later price increases. 64 In general, the more power the grain dealers would have, the better they would be able to dictate terms to the importers. 65
The importers may have therefore lobbied the Athenian authorities to restrain the activities of the grain dealers. This would explain why the law addressed only interactions with the importers but not with local farmers. The local grain producers would not have been able to take their grain elsewhere, which meant they likely had less political power than the foreign importers.
If the ban was enacted to mollify the importers, it may be possible to understand the grain dealers’ behavior. Anytus’s instruction to the grain dealers to keep the wholesale price down conflicts with the goal of appeasing the importers. With his instruction that the dealers should not bid against one another, Anytus in effect told the grain dealers that due to high prices of grain it was more important to find ways to keep price down than to appease the importers. Because the ban on “buying together” was also intended to mollify the importers, the grain dealers could have determined that the restrictions on buying large amounts were also relaxed. In fact, buying large amounts would enable them to have more power and thus negotiate better prices. 66
VI. Why Hoarding Was Not Banned
As discussed in Part III, Athens banned “buying together” but did not expressly prohibit hoarding. The ban on buying together can be explained by moral and political considerations. But those same reasons would presumably have applied to a ban on hoarding. It is therefore necessary to understand why hoarding was not explicitly banned.
One of the challenges inherent in regulating commercial activity is that a regulation could impede beneficial activity. Some systems of competition regulation therefore prefer to prohibit conduct only when it specifically causes harm, rather than banning the entire category of conduct. 67 Athenian authorities likewise may have sought to avoid a ban on all forms of hoarding grain.
Grain storage is usually beneficial and was actually routine in Athens. 68 Storage could generally be a method of managing volatility in the market and enabling Athens to have better control over the supply in case the following year’s harvest was not successful.
Elsewhere in ancient Greece, grain storage was also a regular manner of managing the grain supply. 69 A passage in Hesiod thus seems to express the desirability of storing food for a later season. 70 Archaeological evidence suggests that households devoted considerable space to food storage. 71 And when Selymbria needed funds, citizens were required to deliver up their grain to the state and keep only a year’s supply for themselves, which indicates they ordinarily stored large amounts. 72
But during times of shortage, storing grain could come to be seen as illegitimate profiteering. 73 The conduct that was encouraged in normal years could then be seen as destructive. But Athens may not have wanted to outright ban such activity, along with its desirable effects. Athens may have instead relied on grain overseers to ensure that during times of shortage, when people would have had the incentive to profit by withholding grain from the market, the grain was not stored.
Footnotes
Acknowledgment
I would like to thank Professor Adriaan Lanni of Harvard Law School for her insights and direction.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.