One of the oldest and hardest puzzles in economic history is the failure of Ancient Greek Eastern Mediterranean civilization to make some kind of breakthrough to more rapid development of labor-saving technology, to faster technological progress, and to an industrial revolution. There have always been three theories as to why this did not happen:

• The “insufficient density” theory–not enough thinkers, not enough tinkerers, not enough ability to shape metal finely and precisely for the set of those interested in scientific progress and technological development to reach critical mass.
• The “lack of a market economy” theory: those who would have sought wealth and power through entrepreneurship and enterprise in a modern market economy instead, because trade was small in volume and under the thumb of politics, went into the army or into politics. This misallocation of talent stalled human progress.
• Fuzzier explanations based on the role of slavery in classical civilization and on the elective anti-affinity between the existence of slavery on the one hand and elite interest in boosting productivity on the other.

In 2002, there appeared an article in the Economist shedding light on Greek metalworking prowess and interest in astronomical models. According to the article, few corroded lumps — the last remnants of an elaborate mechanical device – were extracted by accident by a Greek sponge diver in 1900. The Antikythera mechanism, as it is now known, was an astronomical computer capable of predicting the positions of the sun and moon in the zodiac on any given date according to Yale scientist Derek Price. Price believed that the mechanism was strongly suggestive of an ancient Greek tradition of complex mechanical technology which, transmitted via the Arab world, formed the basis of European clockmaking techniques. This fits with another, smaller device that was acquired in 1983 by the Science Museum, which models the motions of the sun and moon. Dating from the sixth century AD, it provides a previously missing link between the Antikythera mechanism and later Islamic calendar computers, such as the 13th century example at the Museum of the History of Science in Oxford. That device, in turn, uses techniques described in a manuscript written by al-Biruni, an Arab astronomer, around 1000AD.

The origins of much modern technology, from railway engines to robots, can be traced back to the elaborate mechanical toys, or automata, that flourished in the 18th century. Those toys, in turn, grew out of the craft of clockmaking. And that craft, like so many other aspects of the modern world, seems to have roots that can be traced right back to ancient Greece.

Therefore the evidence chips away somewhat at first theory.

The Greek word oikonomia (οἰκονομία) designates mainly the oikos (οἶκος), meaning the home or hearth. Xenophon’s dialogue Oeconomicus is concerned with household management and agriculture. The Greeks had no precise term to designate the processes of production and exchange and no word describing or being equivalent of market-based economy.

However as famous American historian Murray Rothbard pointed out, Xenophon outlined the important concept of general equilibrium as a dynamic tendency of the economy by stating that when there are too many coppersmiths, copper becomes cheap and the smiths go bankrupt and turn to other activities, as would happen in agriculture or any other industry. He also saw clearly that an increase in the supply of a commodity causes a fall in its price. These thoughts correspond to the collective wisdom of modern market economy, chipping away on the second theory. There are other sources arguing the power of the market mentality attained in Ancient Greece.

There is no countering the third theory – not from my side at least!