Comparing Economic Systems: Athens and Sparta
Part 1: Pericles and the Golden Age of Athens
Although the economic systems of many of the Greek city-states were similar, there were some important differences. Perhaps the greatest differences were between the city-states of Athens and Sparta. One way to think about the differences is to see Athens-under the influence of Pericles -as having many of the characteristics of a democratic market economy. Sparta - under the laws of Lycurgus - had many characteristics of a command economy and political system.
Pericles (495-429 BC) helped gain approval of the constitutional reforms that brought about the full Athenian democracy in 461 BC. He presided over the Golden Age and most prosperous period for ancient Athens (443-429 BC). A general and statesman, Pericles became virtually an uncrowned king. He had a public reputation for honesty, but politically he was regarded as a radical. He was a staunch opponent of Sparta. His hostility toward Sparta brought about the Peloponnesian War (431-404 BC).
Renowned for his oratory, his famous Funeral Speech (431 or 430 BC), as recorded by Thucydides, describes some of his ideas about Athens' democratic principles:
Our constitution is called a democracy because power is in the hands not of a minority but of the whole people. When it is a question of settling private disputes, everyone is equal before the law, when it is a question of putting one person before another in positions of public responsibility, what counts is not membership of a particular class, but the actual ability which the man possesses.. ..
And, just as our political life is free and open, so is our day-to-day life in our relations with each other. We do not get into a state with our next door neighbor if he enjoys himself in his own way. We are free and tolerant in our private lives; but in public aflairs we keep to the law.
The Nobel-laureate economic historian Douglass North wrote the following about the economy of Athens during the time of Pericles:
In this case a free internal market for goods and services on the one hand provided ownership rights... in land, capital, and labor and, on the other, controlled international trade in grain to guarantee a food supply.
Part 2 Lycurgus and the Military State of Sparta
Lycurgus is the legendary lawgiver of Sparta. He is credited with making the Spartan ideals of harsh military discipline a model for the entire Spartan economy. There is some disagreement among historians about whether or not there really was such a person, but some scholars claim his measures were instrumental in preventing a second helot (slave) revolt.
The Roman historian Plutarch wrote the following description of Lycurgus' policies:
Lycurgus addressed the question of land ownership. At this time, there was extreme inequality among the Spartans, with most of the wealth and land in the control of only a few. Most of the people felt poor and unhappy. Arrogance and envy, luxury and crime, resulted from this unequal distribution of property.
Lycurgus divided the land equally. So that merit - not money - became the I only measure of a man's worth. Lycurgus intended to remove any inequalities in ownership of personal property as well as real property. ... His solution was to ban ownership of gold or silver, and to allow only money made of iron. Iron coins of Sparta were dipped in vinegar to make the metal brittle and worthless.
Merchants laughed at this money because it had no intrinsic value, so imports of luxuries stopped. The most effective measure against the love of money was Lycurgus' law that all meals had to be eaten together in public mess halls. Everyone ate the same thing, so money could not buy dainty food. And since the rich could not eat at home, there was no way for them to show off their fancy things. The rich could no longer spend their lives at home, lying on their couches and stuffing
themselves with unwholesome delicacies, like pigs being fattened for slaughter.
Comparing Economic Systems: The United States
Property Rights in a Market Economy
Markets are places where goods and services are traded, and people can trade things that they own. Therefore, in this respect the most basic economic freedom is the right to own and use property as you wish. This freedom, like all others, has some restrictions - for example, it is illegal to buy or sell some products. Nevertheless, clearly defined property rights that are effectively enforced by a
nation's legal system are a fundamental characteristic of a market economy.
Read each of the quotations below, taken from the Constitution of the United States. Be prepared to discuss how these provisions protect the right to own, buy, and sell private property.
Part 1 Excerpts from the United States Constitution
Article I, Section 10.
"No State shall.. .coin Money; emit Bills of Credit; make any Thing but gold and silver Coin aTender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligations of Contracts.. . . "
"No person shall.. .be deprived of life, liberty, or property, without due process of law.. . ."
Amendment XIV. Section 1.
"No State shall.. .deprive any person of life, liberty, or property, without due process of law; . . .nor deny to any person within its jurisdiction the equal protection of the laws."
"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States,
are reserved to the States respectively, or to the people."
Property Rights in a Command Economy
The most basic characteristic of a command economy is central planning to determine the allocation
Property Rights in a Command Economy
The most basic characteristic of a command economy is central planning to determine the allocation of resources, rather than allowing individuals and privately-owned firms to decide how to use the resources. In communist and socialist economies, factories, heavy machinery, and in many cases other kinds of businesses and resources are owned by the state. That makes it very clear who will
decide how those resources will be used.
Read each of the quotations below from the Constitution of the Republic of Cuba (revised in 1992).Be prepared to discuss how these provisions strengthen the state's right to own property, and limit property rights for individuals and privately-owned firms.
Part 2 Excerpts from the Constitution of the Republic of Cuba
"The Communist Party of Cuba.. .is the superior leading force of the society and the state, that organizes and orients the common efforts toward the lofty ends of the construction of socialism and the advance toward the communist society."
"In the Cuban Republic the economic system is based on the socialistic ownership of all the fundamental means of production.. . ."
"Also, the principle of socialist distribution of each according to his capacity, and to each according to his labor, governs. "
"These are socialist state properties of all the people:
a) Land that does not pertain to the small farmers or cooperatives.. .
b) Sugar refineries, factories, fundamental (basic) means of transportation, and whatever enterprises, banks and installations have been nationalized and expropriated from the imperialists, estate owners and the bourgeois, as well as the factories, economic enterprises and installations and scientific, social and cultural centers and sports buildings. . . "
"The state organizes, directs and controls the economic national activity according to a plan that guarantees the proper development of the country to the end of strengthening the socialist system.. . ."