Markets in pre-industrial societies: storage in Hellenistic Babylonia in the medieval English mirror

At least some ancient civilizations used various risk-management strategies to minimize price volatility. In this article, we examine one such strategy, grain storage, by means of a dataset recently made available that provides agricultural prices for Babylonia during the Late Achaemenid and Hellenistic periods (c.400–65 BCE). A comparative analysis of medieval England and Hellenistic Babylonia reveals a low level of inter-annual storage in both economies, and helps us to compare the costs and benefits in each society. Costs are largely equated with interest rates, and benefits with seasonal price changes. Unlike in England, Babylonia’s dual crop structure (barley and dates) reduced seasonality and thus the potential benefits of storage. There is no evidence, however, that storage costs – that is, interest rates – were likewise lower. This suggests that interest rates were primarily determined in the urban and commercial sectors, not the agricultural one. Consequently, measures of seasonal price changes in pre-modern economies may tell us relatively little about interest rates. While the McCloskey–Nash methodology may be helpful in analysing particular economies, it is perhaps of limited use for comparing them.