Liam Turpin:	Good afternoon. I'm Liam Turpin from the Department of Classics. And I'm honored this afternoon to introduce professor Peter Temin, who is Elisha Gray II Professor Emeritus of Economics at MIT. Professor Temin graduated from Swarthmore with highest honors in economics in 1959 and earned a PhD in Economics from MIT in 1964. He spent most of his teaching career in the amazing Economics Department at MIT. But he also spent a year at Cambridge as the Pitt Professor of American History and Institutions.
	And of course that points the way to why it's me that's up here introducing him. Professor Temin is one of this country's most distinguished economic historians, with numerous books and articles on the economic history of the United States and the world during the Great Depression, on the United States in the 19th century, on England in the 18th century, and on the Roman Empire. He has also written on more general, non-historical economic topics including a book this year on The Leaderless Economy: Why the World Economic System Fell Apart and How to Fix It, which sounds both timely and important. But of course the Roman Empire is every bit as mysterious and exciting as our own republic. And after a string of important articles professor Temin this year has also published his book on The Roman Market Economy.
	Today he'll be speaking to us on statistics and ancient history. Please join me in welcoming professor Temin back to Swarthmore.
Peter Temin:	Okay. Thank you. So yes. Okay. Good. Okay. Trust you all can hear me, particularly the students who are safely far away from me. Yes? And let me say I welcome questions at any point by anyone, even if you just can't hear me or you don't understand what I'm saying or you want to object to it from either that side or this side of the auditorium. 
	So I'm structured this as a tale of three students. First being at Swarthmore in the honors program. That's where I learned about this kind of interactive classroom. And that's why, of course, I welcome questions and happy to be here. And so on. So there's there. 
	So here is what the paper's about. Was there a market in Roman times that went all around the Mediterranean from one end to the other? In other words not a local market but a market throughout the Mediterranean in the early Roman Empire. That's really for ancient historians, for modern ... for ancient historians and modern economists, then is can we write the history of Rome with a half a dozen observations. So to the extent you have statistics here it's very small sample statistics. And then more for the economists there is the theory of the small sample regression assumes that the observations are random, randomly selected from a larger population. And how do we know that's true when we have ancient data? And so that's the third question.
	And here are the answers in case you don't stay to the end. Yes. There was a market. That's what I'm gonna try and assert to you. And there's a lot of institutional detail that goes along with that that's also in my book. And can we write the history from six observations? Well if you know ancient history you know that that's a lot of observations. And so if that's all you have that's what you work with for it. And then randomness, I'm gonna approach this in two ways. One, talk a little bit about survival of data for 2,000 years, and that's a kind of argument for methodology. And the other is that I found some other data, so I can actually test my sample against other samples. So good fun.
	Okay. So here we're gonna do to start I wrote and published this original paper five years ago or so, a long time ago. And I'll discuss some objections then. Then I'll use the new data, as I said, to deal with randomness. And then come back to conclusions.
	So the first, so now we're up to the second student. And so the economists know who Ben Friedman is. And David Kessler came to write an undergraduate thesis with me about Rome [inaudible 00:05:10]. And he didn't know that in Roman history you didn't have any price data. So on just Rickman's The Corn Supply, 1980 book, on one page he found some prices, and he said, "Hey. Prices? Undergraduate? We could run a regression." So here is what it was. Six prices. We expressed the prices discounts from the presumed prices at Rome. Presumed prices, price the ancient historians will know the [inaudible 00:05:46], the distribution of free ... of wheat to Roman citizens, which of course distorted the price and of course meant that we don't have a lot of observation. So we've had to ... I followed a couple of ancient historians in what the Roman price was. And then graphed the prices by their distance from Rome with special attention to the Po Valley because if you think of the shape of Italy ... I don't have a slide for this, but you all know what Italy looks like, Rome is on one side of the mountains. The Po Valley, the observations on the other side of the mountains.
	So it's very close over the mountains, but if you think that the stuff was taken by ship then it couldn't go in a straight line. It had to go down and back up. So we played with the distance [inaudible 00:06:48]. And that's why the regressions have six observations. But I do them also with five observations leaving out the Po Valley because I had to guess on the distance.
	Okay. And this is the graph. And if you remember nothing else from this talk I want you to remember this graph because it really looked like the further you get from Rome the lower the price is. The greater the discount from the Roman price. So you see the Roman price just sets the scale on the left. The fact the prices get lower the lower [inaudible 00:07:30]. But a lot of people, a lot of ancient historians have noticed that things were cheaper outside Rome. Not being economists they don't say, "Hm. Why should prices be lower outside Rome?" So but this is what's there. And certainly looks like here that the market for wheat is in Rome and then the further you're away, when you get to Egypt or Palestine, far away, then the price there was the price in Rome less the cost of passage, of taking it up, because people would come looking for it if they could sell it in Rome. 
	So you can think of two hypotheses then. So here it is. So yes. I'm just saying okay. I've already said that slide. So how would this market work? Then think about Sicily, which Sicily is the closest to Rome. You see over on the left hand side of the graph. Sicily worth less than the wheat in Rome but not that much because it's close to Rome. What does that mean if the Sicilian price rose higher than the price at Rome less the transportation [inaudible 00:09:00]. Then merchants wouldn't buy it to send to Rome, and so the price would then fall. This is the process. If the Sicilian price fell below the level at Rome minus the transportation cost then Roman merchants would run to buy it all up and make a killing in Rome. 
	And that's what I mean by a market. Now that's a very simple market but that's a market nonetheless. What's the alternative? Well the alternative given by a lot of ancient historians and particularly ancient historians of an earlier generation was of unrelated markets. Yes, there were local markets, but there was nothing like a market throughout the Mediterranean and a market that would go from Egypt at one end to Spain on the other hand and Sicily to Egypt again and so on. And that would give you only stable relations. 
	Okay. So the question is how do you choose between these possibilities? One is ... whoops. Whoops. [inaudible 00:10:19]. One is the market. The other is just local markets. Well it [inaudible 00:10:27] very important because if you think there are these markets, just a market unified round there, then that suggests the Roman Empire had a well organized market throughout the Mediterranean. You might ask, what are the institutions that supported that? I can talk about that 'cause we have other evidence on that. What was the legal situation? How could people transact business at this level? It has a whole lot of implicit questions about the nature of the Roman economy. 
	So how to do this is ... let's see. Where am I? Is to use statistics. Now I need to talk about the difference between the disciplines of ancient history and the discipline of economics. Because the economists like randomness. I saw a couple people nodding their heads when I was talking earlier about having a random sample. Yes. Economists like random samples and random things because we can use our theory to try and see if there's some signal in among all the randomness [inaudible 00:11:39]. But ancient historians are trained to look at each observation, try to understand it, try and get the right translation, try and make sure you know where it came from, try and date it, try and understand what people are saying. And so they're very concerned to get each data point there. 
	Whereas a economitrician, that is to say an economist would say, "Well if I only observe the price ... " or let's say the distance since that we estimated just on a map. If I only estimated the distance imperfectly, well the economist would say, "Well that's in errors and variables and we know that'll buy us our result, but we know in which direction. We can account for it." And the ancient historian says, "What? You're estimating distance from looking at a map? You've got to really think seriously about this." 
	Okay. So regression analysis. Okay. And that's what we did. The least squares line, which tests that the slope that looked to be in that scatter diagram was actually was not random. And then the kind of thing it gets to the randomness. Well that's the least squares line. So you can see it fits very nicely [inaudible 00:13:18] and that's the actual data. And for those of you who know that, these things in parentheses are t statistics. And a t statistic is something that measures how precisely you've estimated this number. In other words we normally say that for large samples we say a t statistic [inaudible 00:13:46] if it's greater than ... because the thing is that presumably, if we found a half a dozen prices, maybe there were lots of prices, or at least that's my maintained assumption. There are lots of prices. And we just have a sample. And so it's possible if we did another sample we'd get another different relationship. 
	And so what this t statistic measures is under the assumption of random selection of these six variables that you would get ... that this would show that the line had a downward slope, downward as I showed it to you, upward in [inaudible 00:14:36] because they don't have negative numbers in [inaudible 00:14:39]. You all know that? Yes? Okay. Yes. [inaudible 00:14:43].
Speaker 3:	Are these from the same year? Or are they over different centuries? If they're all from different centuries how do you account for inflation?
Peter Temin:	Okay. Well okay. That's a little bit back in the data because in fact they come from a span of about 150, close to 200 years. And so along with most ancient historians we assume stable prices, assume they are stable prices, but there was a slight inflation over 200 years, a long time. And so we allowed for a little inflation for the later period. All that does is raise the later ones. The discount measures differently on the price of [inaudible 00:15:30]. So yes. That's a very good question. Okay. 
	So possible objections. So maybe you get this because there wasn't any money outside Rome. It didn't have to do with markets but the scarcity of money. But of course this is symmetrical, if you go back and think about the graph. It had countries in the east and countries in the west too. Whereas coins were plentiful in the Greek east and not plentiful on the west then prices are unrepresentative. You know, somebody shows it. Was this before the harvest? After the harvest? Was this just a standard for an average price over many years? Who knows? But of course the economist says, "Well okay. So maybe this is the historical Roman price plus an error that comes, that the observed price is what we have and that's equal to the actual price there plus an error, which we don't observe." But then we can work out the theory of that too. Again all of these errors bias against us having a significant [inaudible 00:16:50]. And you see ... oh, well I forgot to finish this. When we say this, usually two or more means that 19 times out of 20 you're right [inaudible 00:17:01] which seems to be pretty good odds, particularly for ancient history. It's used in current medicine a lot, so your life depends on this stuff [inaudible 00:17:11].
	But if you only have a half a dozen operations, a half a dozen observations, you have to have a higher t statistic to get you right 19 times out of 20. So above three is pretty much the barrier there. And you see these are all above three. Okay. What's happened? My screen's gone out here. So I'll have to look here to see what I'm doing.
	Okay. So here's ... and what happened to my copy? Oh, it fell in here. Okay. So I can find out what I'm doing by looking at my ... thing. So the regression. Regression. Okay. Possible objections. Okay. Disciplinary differences. See? And that's this kind of thing about the regression here and the difference between the fields because the economist doesn't care about being too specific. What the economist says is, "Look. I've got this apparently audacious hypothesis given the literature of ancient history that there was a market there. And all of these approximations militate against finding a pattern. So if I find the pattern that's extraordinary." The ancient historian says, "Oh. But it's not real. It's not an actual thing." Well it is actual observation, but I'm having to use them in this particular way. So it goes back and forth for that. 
	So more objections to think about, which is I used a straight line approximation. It's a very simple model. But of course I only have, with five observations I only have three degrees of freedom. If I put in a curved line or something I'd only have two degrees of freedom. [inaudible 00:19:27]. A lot of people think this is [inaudible 00:19:30]. But then it becomes really [inaudible 00:19:33]. I should tell the economist here that this exercise is regularly taught to first year graduate students in their econometrics class. Why? Because with five or six observations you don't have to do asymptotic properties. You can actually calculate all the kinds of things that you have in the theory of estimation. So they use it. So I would have ... back when I was teaching there I'd have students greet me in the halls and say, "Yes. Your regression really works." Which is very nice [inaudible 00:20:13]. And so on. So that's what I've said here.
	Okay. So then for that. Let me go over to see where I am. Okay. Now to use this theory I've assumed randomly. So a random sample. So that t statistic that measured the probability measured it under the assumption that the choice of data was random. How do you test for random? Well the first is to say, "Well the Roman Empire was a long way away. Even modern economists know that." And so on. "And so it's an accident when something survived and something didn't. And so it's a reasonable assumption that what we have today is in fact a random sample. And in fact that's how all ancient history is written because people find a manuscript. And they say, 'Oh, I could generalize from this manuscript.' How can you generalize? You have to assume it's randomly selected. Even one observation randomly selected gives you information, and from that point of view six observations ... ah. You're in heaven." Okay. But then the other way of viewing this is to compare other, other kinds of things. 
	So the first one was Dominic Rathbone, who's a very, very careful guy. Collected all the wheat prices he could find, including prices where people said, "Oh my god. Everybody's starving. We've gotta find something else. We have a great famine. The price is very high." So I took out the prices because while there's a market there surely there must be times when individual places were isolated. Storm, winter, other things going on and so on. And so there could be famines. I'm not saying the market works well in ancient times. In 1947 in India there were lots of famines. [inaudible 00:22:47] wrote a book about that. And so on. 
	So that you can see even with modern railroads you can have isolation and have [inaudible 00:22:55]. So I don't want to look at famine. That's a disconnection. And so on. So I edited the prices, and it gives me new regressions. There's some overlap between the ... between the Rathbone prices and my prices and so on and also some different prices. And you'll see you get there a little lower r squared for that. But he didn't collect the price for Rome because he didn't believe you could get a reasonable price in Rome for the reasons I said earlier. So I just put in a time dummy for that, to represent this small amount of inflation. So you can see the distance still shows up, but it's not as strong when you do that even though I may have edited the prices to get the result because even if I said I was being fair and just taking out the famine, it was my decision whether it was famine or not. And maybe I did it, even unconsciously, to defend my earlier work.
	Well I'm not against defending my work, so I don't know. So there are the [inaudible 00:24:17]. So I guess they're the qualifications. Someone ... how do I know I was not [inaudible 00:24:25] bias. Okay. Okay. 
	So another data set would help. Student three. William Harris, ancient historian at Columbia University, invited me to teach a course at Columbia in economics for young ancient historians. And I did this based on the stuff I've given you already in the paper because that had been done and published in 2008. This was 2009. And I presented the graphs that you've seen. The graph with the line down it. And particularly the scatter diagram. And a student jumped up and moved the data point. And this is from his paper. He's called [inaudible 00:25:27]. That's the student. And in his paper this is what he did on the blackboard. He said, "If you took this observation and put it over here." This is the one from Asia Minor. "Then you wouldn't have a regression. It would just look like a cloud of points. Here [inaudible 00:25:47] Sicily and so on. [inaudible 00:25:51]."
	Well he in fact did that, and I frankly couldn't figure out what to say because what's important about regressions, if you want to have the randomness, you have to pick the data before you do the regression. If you can pick the data after you do the regression, well why stop there? He doesn't want to have something. I do. I'll put it back. I'll bring this up. Put this down. You're gonna get a good line. I mean anything can do anything. But it no longer tests a hypothesis if you can jiggle the data after the fact.
	So what to do. Well he ... oh okay. Here's the explanation of what I just said for that. Okay. So [inaudible 00:26:49] then wrote a new paper about this and [inaudible 00:26:52]. As you can see he was no friend of what I did. That graph should just make that clear. Suspicious both of the methodology and the conclusion. And so I'm for that. And so he got a ... sent me a link to his paper, and it was just put on the internet in 2012. And [inaudible 00:27:18] my book was in page proof, so all I could do was put a mention of it because there was a space at the end of a paragraph. But later I felt it justified a whole paper, so here it is.
	Ok. Now [inaudible 00:27:34] has a paper. The paper turned out to be ambivalent. He praised the introduction of statistics. Said that was a useful thing. But he said wrong results. Just couldn't be doing that. And he provided a new data set, with actually 12 objects, doubling the number of observations, and he did a few regressions. And said the first two rows of this next table are there. He divided the data into six coastal prices and six inland prices. Just want to emphasize here they're not gathered to prove my point, even unconsciously as you can see from the picture, he didn't like [inaudible 00:28:23]. 
	So here's the thing. I want to emphasize the top two regressions were [inaudible 00:28:31]. And so what did he do? He put distance in for all 12 of them. High t statistic. That's what I said. Taking just the six coastal ones, even higher t statistic. There [inaudible 00:28:51] explains almost everything. It's the are square proportion of the [inaudible 00:28:57], and he said, "Oh look. When you add the distance ones, you get more noise. You don't explain it."
	Well okay. So what was going on here? What was going on here? So I played with it. And the two bottom regressions are my regressions. I took all of his 12 observations, but I put a dummy in for the observations that he said inland because you might think that just doing the distance as I do it was assuming everything went by sea. But you think inland prices would be going ... having overland, which would cost more. So I put that in. And so what does that do? Increases the t statistic. Increases [inaudible 00:29:51] the proportion explained way [inaudible 00:29:54]. So it's very [inaudible 00:29:54]. 
	So let me finish this. And I'm gonna come back to that for a minute. Is I took a observation out of that. This is the observation that he moved. And so I thought maybe moving that observation was making all the difference and so on, so I did the estimation without that. And you see you get essentially the same regression. So that's what I did [inaudible 00:30:27] taking out the Po Valley and looking at it. So it wasn't due to this troublesome observation that he talked about. 
	But there is a problem. The sign on the inland dummy is wrong. You see, it's positive. And further away should be negative because we're expressing the prices as the discount from Rome. So if it's inland it should be discounted even more because it's coming over land. So it would be worth even less. And so here positive. It increased the r squared but it has the wrong sign. What's going on? So could it be inaccurate? He added these inland prices, and he estimated the over land price, over land cost, as being 25 times as expensive as oversea cost. Maybe he overestimated the [inaudible 00:31:48]. I used five times in my Po Valley [inaudible 00:31:51]. But what was going on? So for that. 
	So here is [inaudible 00:32:06] result. And you can see that's just taken from his paper. And you can see it looks very down. This is the outlier one that I took out. That's the one in present day Turkey that I took out to see if the thing still held, and it does. So that's the thing there. And you can see it still has the scatter. Still looks good for that.
	So where are we here? A suggestion. Well I can't do a new data set. There are two reasons for that. One is I'm very committed to my earlier result, and I've written a whole book based on it now, so I'm not about to write another book disproving it. Yes. And so on and so on. But also I'm an economist. I can use data, but I can't do the process of getting the data, translating it, vetting it, dating it, understanding what it is. So that has to be done. So I say, "Maybe somebody should do more." And what my regression I think shows is that the critical point is going to be trying to think about the cost of overland transportation. So in Egypt if you have to come over land, you go down the Nile, that's one cost. In Turkey to get to the Mediterranean you have to go across mountains. That should be a different cost. So then it gets ... you have to go back and look at each observation and try and see what's going on. And I don't know. Any of you want to do that? I'll be very interested to see what comes out of that for that.
	So conclusion. So on method I argue that in fact this was a random sample. That it behaves like it. Not only was the process a process that should have given us the random sample, but then when I look at data, some overlapping, some different, collected by other people, some with other points of view, the basic result that wheat is worth less the further it is from Rome is the same. So content, what this says was that even farmers in Spain or on present day Turkey or in Egypt were in touch with the market in Rome. Because otherwise the price would just be unrelated. Now it doesn't mean that every Roman farmer had a [inaudible 00:35:09] in his farm looking at the Roman prices, but it means that there's a chain of people that go through. They're the people who come in in Alexandria to try and get wheat. And they are looking at merchants in Rome. And merchants in the country of Egypt. And as you go through that, the consciousness of the market [inaudible 00:35:35]. It also doesn't mean that every modius, that's their weight of wheat, was sold in Rome. Because once you had this price structure people could trade wheat around the Mediterranean not necessarily with Rome. It just anchored in Rome because that's where the consumption is. 
	And so you can have a more complicated process. As I said earlier I used a simple model because that's all I can do with just these few observations, but there could be complex realities underneath that in this [inaudible 00:36:20]. The qualifications of course is that there were famines as Rathbone said, and to get the longer version of this there's a table giving the state interventions when there were local famines. So we know there were famines. What we don't know is how often they came. If you just look at the records that are survived it's only every once in awhile. So you say, "In general there's a market. But like any seaborne market it gets interrupted from time to time. But in general one can [inaudible 00:37:07]." 
	So that's then the picture on the cover of my book, which is a Roman ship. And that comes from the Port of Rome. The name ... what's the port ... Ostia. Thank you. [inaudible 00:37:24]. Ostia advertising a merchant for that. And it's in this time period. So that's what the wheat was actually carried in, something that looked sort of like that. And so there's a lot more there. But to come back to my original point then that if you think that this is an accurate view of the Roman economy, all tied together, that argues for a fairly well developed commercial economy. The agriculture all around the Roman basin was all hooked together. Most years, not all the time, but most years, people could make plans for it. People had to think about how to ship there. I've got it for wheat. Maybe for oil. We went to ... my wife and I went to Morocco this January 'cause I was giving papers, including this one, in England. We went to Morocco and visited the town of [inaudible 00:38:34], which is are near Gibraltar in northern Morocco. And there were 500 oil presses found in the environs of there. So they exported oil.
	But it's interesting to think [inaudible 00:38:56] at the far end of the Mediterranean was selling its oil then in Rome and if we had the prices it would look very much like the wheat market. So it has all kinds of implications for what you think about Rome and of course it would make the people in Italy, particularly in the city of Rome, rather wealthy, because they would be sitting at the point and occupying all of this. And so you have a lot of prosperity at that time. A lot of people in Rome were rich enough to have villas down south of Rome, south of Italy [inaudible 00:39:35] and they would have the leisure to write stuff, the leisure and the education to read stuff, so we have all of the things that we think of as the classics. And this doesn't say anything about it except it says something about how they might have gotten the income and the [inaudible 00:39:56] to be doing all this stuff that they were doing.
	So that's the presentation. Welcome any questions.
	Yes.
Speaker 4:	I don't understand why the guy [inaudible 00:40:23] moved the number [inaudible 00:40:26]. Was he just saying just for fun or was he saying [inaudible 00:40:32] outlier because [inaudible 00:40:35]?
Peter Temin:	That's right. Well what he was saying was that you've got all this data, and it's just such a small sample that if I take a variable and just move it around I can destroy your result. Your result is very tenuous. But I was saying in fact it is tenuous. There are only a half a dozen observations. I only have five [inaudible 00:41:06]. Five solid observations. And so the thing is that it's tenuous because if we'd found different data maybe we'd get a different result. But once we find it we can't alter it to change the result after somebody has tried to test a hypothesis with it. And he picked the city in ... the thing, so if you look at his thing with 12 people and estimating the cost of taking stuff over the mountains, it becomes a real outlier. So that's he was thinking this is some kind of special case, even back then.
Speaker 4:	[inaudible 00:41:51].
Peter Temin:	Well yes. But the point is that you have to make everybody's transportation. You can't make a rule ... this is what I was explaining to you about the Po Valley, that you can't have a separate rule for each observations because then you're making up all the observations. So what you have to have is a uniform thing. And that's why I said somebody ... you have to redo the whole data set in other words if you're gonna take that is 25 times the right multiplier? Is it the same for Egypt then for Turkey? That you have to decide ... make a decision rule and then apply that to all the observations. [inaudible 00:42:47] Get the pretty picture back. Okay. Students have any questions? Either economists about small samples? Or ancient historians about what economists are doing messing around with their field?
	Yes.
Speaker 5:	Any evidence for merchants in Rome [inaudible 00:43:08] actively going out and scouting [inaudible 00:43:14] markets and finding out what the price is of [inaudible 00:43:17].
Peter Temin:	Yeah. No.
Speaker 5:	It sounds like [inaudible 00:43:24].
Peter Temin:	Yeah. We don't have an account of ... biography of somebody going out and looking at it. What we have are merchant kinds of things that go along. So for example, just to give you one example of this, if you send something from Egypt to Rome, how do you know that what you sent from Egypt is the same thing that arrives in Rome? We bought a rug while we were in Morocco, and the guy said, "We're gonna turn it over. And I want you to put your initials on the back so that you'll know when I send it to you that it's the same rug." Because people do do things like that. So one thing is to take a little bag or a jar of wheat that was put there and seal it, put a seal on it, and send it with it so that you could test the quality of the wheat. Somebody hadn't taken out half of the wheat and put straw in it again. 
	Another thing they did was to draw a line on the ship inside the hold of the ship where they had put the level of the wheat. So if it arrived and the wheat was only down there they would know it was half empty. So there were a variety of things. They had receipts that went back and forth. And we have a reference to having the receipts done in triplicate. Triplicate. Wow. Who took all the ... well one for the sender, one for the receiver, what was the third one for? Was somebody monitoring this? Was there a central office someplace taking care of this? We don't know that but boy, is that intriguing. Yes. So there were all kinds of institutions that were set up for this. Well this is in Ostia. One of the things that ... if you go to the Port of Ostia you can still see the pavement that had this in it, and they'll tell you, "These are the booths of merchants of various sorts." They're all in the same place. They didn't have to go out and search things. They could walk down to the next booth and say, "Hey. What's going on where you're dealing with?" It's a place to share information. So [inaudible 00:46:02].
	Yes.
Speaker 6:	[inaudible 00:46:09] I wonder [inaudible 00:46:11] but it seems pretty easy to make up stories that [inaudible 00:46:20]. So I just wondered what [inaudible 00:46:28].
Peter Temin:	Well they come from different sources. So there's no uniform statement that you can make about them because some come from travelers being told, "Oh. The price of wheat here is this." Others come from the Egyptian prices we have some actual market prices. The one from Turkey comes from a proclamation that somebody made about the price and so on. So there's no single rule that seems to say it would bias it either to be out in the country or in the city and so on. But it looks like what they had comes from different sources and we had it. And it was collected together. And the real argument is that since I did this, Dominic Rathbone, who was a terrific ancient historian and [inaudible 00:47:38] who was a younger but quite good ancient historian, have looked for other prices, and they are consistent with this. So that's my justification. Yes.
Speaker 7:	Yes. So I guess my question is if there is this Mediterranean wide market, and if some people are filling out these triplicates, how come there are so few prices [inaudible 00:48:05]?
Peter Temin:	That is one of those really interesting questions. So the analogy I made in an earlier thing, and I can't remember whether it survived into the book, was that doing economic history for Rome is like trying to understand the American economy by reading the New York Review of Books. If you read the New York Review of Books, that's all the information you had about the US, you wouldn't find many prices there, but you would find an awful lot of people talking about the economy back and forth. So you could learn some things and have a sense that there were markets, but you wouldn't actually have the price. So it's hard to know. How did they do the prices? Well the way the ... it's a bit like emails today. Think of that. The way the Romans did their temporary thing, they didn't use paper. They used papyrus for books and things, but they used that for the stuff that we have today, to write things in. For business they didn't. They used a wooden frame about this big. And put a thin frame of wax on it. And then you have the wax soft and you take a stylus and you write [inaudible 00:49:31] Roman letters all go in a straight line, and so you write in there and then it folded over and you could wrap it up and so on.
	So they would have that. And in fact somebody might have a store of those things, but if there house burns down sometime in the next 2,000 years, high probability event, of course wax is all gone. So only if somebody thought it was important enough to be chiseled into stone, very few people chiseled into stone, Duncan Jones collected the price of statues because statues these people were making stone statues and they put on there the donor would put on, "I paid x amount of [inaudible 00:50:24] for this statue." And so there we have a price, but of course statues aren't homogeneous, so we can't do that like the price of wheat, which we do by weight. And so on.
	So it's very hard to know why there aren't as many prices. But you know when we get prices in the ancient world we don't get them from ... we actually have more observation of interest rates in the ancient world than we do of retail prices. So the capital market worked well. And for example we know again coming back to the institution that if you borrowed money there was one interest rate [inaudible 00:51:13] but if you borrowed it to transport grain across the Mediterranean there was a higher rate because if the ship sank the loan was forgiven. So the higher rate was an insurance premium.
	So we know that. We know interest rates moved when things happened and so on. But retail prices ... we have retail prices for Hellenistic Babylon. I like to tell this story because the priest of the temple of Marduk collected them. Who even knows what the religion is of Marduk and other [inaudible 00:52:04] but what they did was they collected data on the rivers because they wanted to know ... this is in Babylon, in Iraq, present day Iraq, is to know when the river was gonna flood and when it was gonna go down, so they collected data about the phases of the moon and all kinds of other things. And down at the bottom they also collected prices. Yeah. We say, "Why did they collect prices?" Well that's 'cause we have a theory that says prices don't effect the height of the river but the moon might do it and so collecting data on the phases of the moon was sensible collecting it on prices [inaudible 00:52:56]. But we don't know how they thought of it, and maybe they thought prices affected it or maybe they just thought, "We'll collect all the data because something in here predicts it." And then they would work through it. 
	The problem with the data set is they wrote not on wax but on clay tablets. When you burn clay tablets it turns into pottery. It lasts for 2,000 years. So we found them. But the prices were at the bottom. They did this monthly. But the prices were at the bottom, so an awful lot of the tabulations got chipped off. So [inaudible 00:53:37] of missing observations. Nothing comes ... when you're doing ancient history, nothing comes out clean. But we have lots ... I have thousands of observations. From there ... and there I can test sophisticated hypotheses. But not trade because they're all the prices in one place. This is the only data set where you have comparable prices in all different prices of the Mediterranean. Yes.
Speaker 8:	[inaudible 00:54:11].
Peter Temin:	Yeah. Yeah. 
Speaker 8:	[inaudible 00:54:17].
Peter Temin:	There ... okay. Oh, yeah. Well we have a lot information as you know. From that ... what we do know is that they collected the ... they distributed the wheat, the [inaudible 00:54:45] with a free distribution of wheat in Rome. Where did the wheat come from? It came from Egypt and Africa. How did it get there? By ships. Whose ships? Interesting question because the Roman state didn't own ships. They owned a few war ships but didn't own good, serviceable ships like this. And so they contracted out with private shippers. And we know that from a lot of documentary evidence. And so that was a private market [inaudible 00:55:24]. So the [inaudible 00:55:26] contributed to the facilities for people to get the wheat back and forth. So that tended to make the market work better.
	But in Rome itself giving to a lot ... there are disputes among Roman historians what proportion of the consumption at Rome was in the [inaudible 00:55:52]. So depending on that you think we'd have more or less distortion, but it would distort the price at Rome. So there are various arguments and people go back and forth. And as you said Rathbone doesn't believe any of them, so he just refused to give them. Well I'm a credulous economist. [inaudible 00:56:13] took some to anchor my [inaudible 00:56:16]. So yeah.
Speaker 9:	[inaudible 00:56:19] randomness out [inaudible 00:56:22] regressions [inaudible 00:56:24]. But feasibly there could be two, there could be two [crosstalk 00:56:37].
Peter Temin:	Yeah. Yeah. The problem is the only thing that we know ... [inaudible 00:56:41] identify where each of these are listed. The only thing we know about these things is where they come from. And we have the standard history of the wheat market. But if you look at [inaudible 00:57:01] book on the wheat market, which has bad economics, and I told him that, and he said, "You're probably right, but the book is already too far advanced. And I have to change everything if I took your advice, so I'm not gonna do it." So don't look at the bad economics in the book, but look at his observations. He argues that in fact they got wheat from a lot of different places. And everybody talks about it coming from Egypt. But he estimates that only about a third of it came from Egypt. The rest of it came ... a lot came from Spain. A lot came from elsewhere.
Speaker 9:	[inaudible 00:57:37] this all depends on [inaudible 00:57:40] information can't outpace [inaudible 00:57:43]. If you know about the price of wheat [inaudible 00:57:46]. You'd want much more frequent exchange [crosstalk 00:57:54].
Peter Temin:	No, no. That's a terrific point. Yes. And it must have been. So Fred asked earlier about inflation. People since these prices are collected over two centuries, people must have expected that the prices were gonna be pretty stable. And so that actually to an economist is too stable for ... pretty stable for two centuries, how did they do it? The modern world we can't do that? How did they do it? Well I have another paper on that. And so on. But the thing is but then around year 200 of our system it begins to be an inflation and then you can't observe this kind of stuff. Again then you get expectations coming in. But you're right that for this it presumes not just trade but also a consciousness of trade so people could use the information they had in past years to plan for current years. Yeah.
Speaker 10:	[inaudible 00:59:01].
Peter Temin:	Well the latest date is approximately 200 of the common era. As to how far back you go, roughly ... well I'd say probably 300 years, certainly back 100 years, getting earlier than that you have very few observations. And so you just don't know. But it seems to be ... so maybe it's even 300 or 400 years. But that just makes it more extraordinary. Yeah. 
Speaker 11:	[inaudible 00:59:39].
Peter Temin:	That's before they what?
Speaker 11:	[inaudible 00:59:43].
Peter Temin:	Yeah. Yeah. Comes in.
Speaker 11:	[inaudible 00:59:48].
Peter Temin:	Oh. Good question. Gotta think about that for a minute. 
Speaker 11:	Po Valley [inaudible 01:00:09].
Peter Temin:	Oh. So it is before [inaudible 01:00:11]. Oh. Hm. 
Speaker 11:	[inaudible 01:00:22].
Peter Temin:	Yeah. Okay. Yeah. That's [inaudible 01:00:24]. Well Rome was successful and a large consumer of wheat. They needed to import it 'cause it was too big to grow their own thing even before we have a lot of observations and before the [inaudible 01:00:46] started. And so what we have to say is that the price that we took after the [inaudible 01:00:54] from the observations, very few observations we have, is implicitly projecting it backward. It's a proxy for the earlier price in Rome where we don't have an observation and so the fact that we put it together suggests that it's good. But it also ... see if you get too many assumptions about doing all this stuff afterwards then you say, "No, it's not these observations. It's the assumptions you put." That's why I wanted you to remember the graph even before you get to all of the analysis. 'Cause you still have ... you know, with a pretty persuasive graph, that's with more variables, the earlier graph, more observation, the earlier one with fewer of them. 
	But that's a very good question. Yes. So that's a long time, and even if the price level stays the same, the coinage gets revised in the early empire too. There's a lot of stuff going on in those years. Yes. And hmm. Of course we use the prices because that's what we have. [inaudible 01:02:07]. But that ... I'll think about it more. That's a very, very good question. 
Speaker 12:	[inaudible 01:02:14]. There's no free wheat. So the fact that somebody gets it in Rome for free doesn't mean it's actually free. [inaudible 01:02:26] government whatever. I don't know anything about [inaudible 01:02:28]. 
Peter Temin:	If you only read one book, read my book. Yes. Okay. 
Speaker 12:	So government or something is buying the wheat.
Peter Temin:	Exactly. Exactly.
Speaker 12:	So your thing all goes through as long as the price in Rome is higher than the price in [inaudible 01:02:51] provinces. So that Rome sets like a [inaudible 01:02:55] price because as long [inaudible 01:02:57] target price in Rome is higher than the price in the provinces, the merchants would go to the provinces, buy ... demand wheat from the provinces until the price rose [inaudible 01:03:09]. So it doesn't really matter how whatever else [inaudible 01:03:15] Rome. It simply matters that the price that merchants get when they bring it to Rome is higher.
Peter Temin:	That's right. But the question comes if the government is the ... in use and economics jargon for ancient historians, the government is a monopsonist in this market, then the free market that goes around the fringe may be higher or lower depending on what's going on. So the question that we ask is when we get an observation about Rome, is it the government price? Is it a private price that is reflecting the fact that the people who don't get the [inaudible 01:03:56] are willing to spend a lot to get that? Or is it a low price because most of the demand has already been satisfied, and these are just the leftovers? For that we have very little observe on that. And so on. But yes. That's exactly what we're assuming. But what we have for the Romans is something about the Roman budget. Roman budget looks a bit like the American budget looked at the height of the war. And there, three quarters, half the three quarters of the budget goes to the military, and everything else goes running other things, but the [inaudible 01:04:37] is no separate line for the [inaudible 01:04:40]. So we don't know that. 
	If there was, we'd try and estimate that. The numbers that you have for that. Okay. Yes.
Speaker 13:	So now we've heard so many possible complications from all these smart questions, all these things that [inaudible 01:05:05] our information. It makes me wonder whether [inaudible 01:05:13].
Peter Temin:	There you go. Well [inaudible 01:05:26]. Okay. This just comes from doing the prices as they were [inaudible 01:05:37]. And that's fine. You can interpret that any way you want. Feel free. I mean I invite you to do that. I followed down a particular methodology. Methodology of regressions and randomness, tried to explain that in the last hour or so, to prove a hypothesis that this is a systematic kind of relationship. But if you have another explanation than say, you know, whatever it is. That you can have some alternate explanation, that's fine. I just tested this, two things, the wheat market, or that's the wheat. Or the alternative, unrelated prices. Random. Well if you go back that doesn't look random to me. And all the things that people say have qualifications. They increase the randomness of the observation. Not the randomness of what happened. The randomness of our information 2,000 years later about what happened and what these prices represent and whether they were observed properly or how people were doing it and so on. 
	And I'm saying, even with all of that randomness coming from the different time periods that people observed it, from the different inland and outland, from how where it was collected, from whether [inaudible 01:07:19] got it or somebody else got it, it still looks very suggestive to me. So even if you don't want to buy any of this stuff. You want to say, "God. I heard so many questions today. And so many qualifications." And so on. You say, "Mm. What does that look like." 'Cause that's before the interpretation. That's what does that look like. And so on. And if you have another idea, I'd just be so happy to hear it. This is my idea. And as I say I've written a whole book, and that ship is on the cover of it, so you can recognize it in the bookstore or on Amazon. So you can see it. And this is a key to thinking about how the Roman economy actually worked.
Liam Turpin:	On that note shall we thank [inaudible 01:08:18].