Grain as Currency: The Open Market Economic System of Ancient Egypt
- Feb 27, 2023
- 7 min read
When we think of ancient civilizations, we often imagine them as primitive and undeveloped. However, this is far from the truth when it comes to ancient Egypt. The Egyptian civilization was amongst the first major human civilizations in existence, and its economy was not only advanced for its time but also highly successful. The sheer magnitude of the Egyptian civilization’s history is intriguing, in part because the Egyptian economy is not a case study but rather an account of evolution over a barely comprehensible timeframe.
In its most fundamental shape, ancient Egypt’s economy lacked the clutter and distractions of today’s economics. There was no such thing as a financial industry, a target inflation rate, a debt cycle, or a derivatives contract. The Egyptians didn’t have things such as bills, mortgages, personal loans, or line of credit – it is far from what we would recognise today. To the point we might fail to see it as an economy that was controlled and planned. Instead, it was an economy that was desperately attempting to gather and distribute its resources in order to solve its fundamental issue; being able to provide for its people.
Egypt’s economy owes a significant amount of its growth to the Nile River, thanks to the yearly flooding it causes and the abundant natural resources it provides. Because the river made irrigation and transportation easier, it made it possible for crops to flourish and for products to be transported over greater distances. The availability of a plentiful supply of food resources paved the way for the development of communities and the division of labor. At the same time, Egypt was also a victim of the Nile. If it failed to flood or didn’t flood properly, the kingdom and the economic system would collapse as it did a number of times.
Egypt was predominantly an agrarian society, which means that the majority of the nation’s labor force was devoted to farming in order to provide enough food for everyone who worked and lived there. This made farming the core industry throughout Egypt’s history. Farming in Egypt was helped by the Nile, which allowed for three harvests a year and was rich in various resources. Most of the farming industry, as we would call it, was mostly owned by the state and administered through the temples, and there were a few wealthy families as well. The temples, the families and the state became known as estates. These estates would then allocate plots to the local farmers, who would then support themselves and society.
The estates were not separate, individual entities but rather interconnected and part of the same distribution network. They were responsible for coordinating the collection and payment of taxes and all were ultimately accountable to the king. This intricate system of estates formed the basis of a feudal society, where different classes of people were tied together through a complex web of obligations and responsibilities. From the Pharaoh down to the farmers and laborers, everyone had a role to play in keeping the kingdom and the economy running smoothly. It’s incredible to think about how this system operated so effectively, given the technological limitations of the time. The ancient Egyptians truly were a marvel of human civilization.
The main players were the temples. These temples served as hubs for a variety of different activities, including business, government, and religion. Even though they would also serve as outposts for the local administration, they would continue to function as places of worship. It was really all bundled into one, similar to how a medieval cathedral operated back in the day. The administration of religion, business, and government were all handled by the same hierarchical structure. All of the food was grown on the land and brought to the temples, where it was then divided up among the laborers in accordance with an equitable and standardized system of wages that were given out in grain. The temples acted like banks and local and national treasuries. Those who controlled the temple, controlled the economy per se. Conflict between the Monarch and the temples would be an ongoing thread in Egyptian history. To the point when some priests were even more powerful than the Pharaoh.
A common form of payment was grain, which could be bartered for almost anything. Grain was more than just a dietary staple; it was also used as money. On the “price charts” of the day, the cost of a cow is depicted as x grains of wheat, while the cost of a shirt is recorded as y grains of wheat. Trading grain for other goods like clothing, livestock, or alcohol laid the groundwork for what we would call “open markets”. It’s clear that even the lowest-paid Egyptian worker benefited from this, as he or she could now enjoy a level of prosperity far beyond that of their neighbors that still lived in tribes in sub Saharan Africa and beyond.
Farming is pretty rudimentary. What you can sustain is directly proportional to how much land you cultivate. More land means more food production; less means less food, and bigger populations mean more people to feed. When this formula was disregarded, entire civilisations, like the Khmer that built Angkor Wat, vanished or experienced what we now consider to be disastrous climate change. Fortunately, Egypt’s temperate climate and riverbanks proved ideal for human habitation and agricultural pursuits. It had good soils, a moderate climate, and built-in irrigation from the river flows that occurred seasonally. It was because of this that Egypt became one of the earliest centers of human culture. The relative ease of farming in this location meant that more calories could be harvested from smaller plots of land with a smaller number of people. This led to Egypt being able to develop a complex society. This meant that there were groups that could devote their time beyond farming, or even have to farm at all.
Scholars and governors, priests and craftspeople who, for the first time in human history, did not labor for the food they ate, formed a more complex social hierarchy. Because of the country’s abundant food supply, Egyptian producers weren’t even required to devote resources to year-round feeding of the country’s growing population. There wasn’t much the farmers could do while their crops were underwater. The pyramids, local temples, quarries, canals, and roadways were all built using the labor of idle farmers under a system that became known as the corvée. During the annual flooding season, able-bodied farmers and laborers were redeployed to building projects. This amounted to a form of taxation, since it required employees to repay an investment of their time rather than a monetary sum.
However, the average Egyptian still paid tax but not in the same way we would today. Egypt had a complex tax system. Since the government does not appear to have been able to handle the details of such a task on a nationwide level, the crown did not tax individuals like farmers. Instead, it placed the onus of delivering revenues to the crown’s coffers squarely on the shoulders of the heads of the estates, as well as ensuring that the domains over which they presided provided the expected surplus. Those who disobey may be subject to disciplinary measures including but not limited to bodily force.
Part of this included a census of resources. In order to keep track of resources and ensure that they were distributed fairly, officials would conduct a census of various goods. This census would include a count of raw materials such as cattle, sheep, and goats, as well as manufactured goods like fabrics and furniture. Once the census was complete, the collected resources would be stored in granaries and storehouses. This practice helped to prevent hoarding and ensure that everyone had access to the goods they needed. By taking stock of the available resources and storing them in a central location, officials could more effectively manage and distribute goods throughout the community or redirect them to national royal building projects, like the pyramids.
Principles such as supply and demand, resource distribution, specialization such as scribes and priests, and the trade-offs involved in economic decision making all played significant roles in the development of the ancient Egyptian economy. These ideas have been around for thousands of years, and they continue to form the basis of contemporary economic systems.
In addition, the economic situation in ancient Egypt had a significant effect on the evolution of human culture. The development and dissemination of Egyptian culture and knowledge were facilitated by the building of monumental monuments and shrines, the establishment of complex trade networks, and the improvement of agricultural practices, along with the developed military complex. We can see evidence of this with the importation of Gods to and from Egypt, such as Baal and Astarte.
The ancient Egyptian social order evolved in tandem with the country’s expanding and more complicated economic system. A more stratified social structure, made possible by the rise of a nobility and specialized professions, enabled for the dissemination of new ideas and the dissemination of cultural artifacts. The pyramids and temples built by this civilization are impressive examples of monumental buildings that stand as a symbol of their lasting legacy, all thanks to their economy..
To sum up, the ancient Egyptian economy was a major cultural breakthrough that has had a lasting impact on our current economic model. We can learn a lot about the ideas that drive economic growth and development by looking at the guiding principles of this ancient civilisation. Evidence of the transformative force of human ingenuity and economic development, ancient Egypt’s legacy lives on.
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