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The Laws of Eshnunna (ca. 1770 BGC, city of Eshnunna in ancient Mesopotamia) set prices for barley and wool in shekels of silver.  These probably were actual prices for Eshnunna's procurement of large amounts of wool and barley.  Here's a calculation of Eshnunna's  price for barley in terms of wool:

"6  mina wool for 1 shekel of silver" [price in Laws of Eshnunna]
60 shekels per mina
360 shekels of wool for 1 shekel of silver
8.33 grams per shekel
3.0 kg of wool per 1 shekel of silver

"1 gur barley for 1 shekel of silver" [price in Laws of Eshnunna] [*]
300 litres per gur
0.3 cubic meter of barley for 1 shekel of silver

Hence 3.0/0.3=10.0 kg of wool per cubic meter of barley

Babylonian astronomers recorded prices for wool and barley from 382 BGC to 72 BGC.  These were probably prices for which transactions actually occurred.  The quartiles for the price distribution of kg of wool per cubic meter of barley over that period are: q1=10.5, median=15.2, q3=18.9.

The price of barley in wool ca. 1770 BGC in Eshnunna was roughly at the 25'th percentage point in the distribution for that price in Babylon about 1500 years later. Eshnunna and Babylon are geographically close in the Tigris-Euphrates river valley.  Both were part of the Old Babylonian Empire.

It seems to me that farming (barley) would provide more propitious circumstances for innovation and capital investment than herding (wool).  Hence I expected productivity growth to be greater in barley than wool.  That would reduce the wool price of barley.   But the data indicate a small shift in the opposite direction.

Any thoughts on the long-run economics of wool and barley in ancient Mesopotamia?

Note:

[*] Roth, Martha Tobi, Harry A. Hoffner, and Piotr Michalowski (1995), Law collections from Mesopotamia and Asia Minor (Altanta, Ga.: Scholars Press) provides both a transliteration and a translation of the Laws of Eshnunna.  The translation, however, gives the relevant law as declaring, "600 silas of barley (can be purchased) for 1 shekel of silver."  The transliteration and other sources indicate that this is a mistake.  The correct figure is 300 silas of barley.  The quoted phrases are my literal translation based on id.'s transliteration of the Sumerian.  A shekel in ancient Mesopotamia was a measure of weight, not a specific coin.

References on Babylonian prices:

R.J. van der Spek, Commodity Prices in Babylon 385 - 61 BC.

R.J. van der Spek, C.A. Mandemakers (2003). "Sense and nonsense in the statistical approach of Babylonian prices," Bibliotheca Orientalis 60, Leiden.

Tags: ancient Mesopotamia, barley, prices, wool

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Ancient Mesopotamian laws set prices for goods and for bad acts.  For example, the Code of Ur-Nammu, written in the city of Ur about 2100-2050 BGC (about 4000 years ago), set "temple expenses" as specific prices in barley, sheep, and butter.  The code also declared, "If a man commits a murder, that man must be killed;" and, "If a man knocks out a tooth of another man, he shall pay two shekels of silver."  The Code of Hammurabi, written in the city of Babylon about 1760 BGC, set prices for doctor's operations of different types and on different classes of persons (six different prices), a price for a veterinary surgeon's operation, prices for building a house, for caulking and pitching a ship, for renting a ship (including different prices for rent inclusive or exclusive of ship crew), for tending oxen and sheep, for farm laborers, for men ploughing, for ox ploughing, for threshing, etc.   It also set prices for bad acts, e.g. "If a man put out the eye of another man, his eye shall be put out"; "If a freed man strike the body of another freed man, he shall pay ten shekels in money."  Other ancient Mesopotamian laws, such as the Laws of Eshnunna (ca. 1770 BGC, city of Eshnunna) and the Laws of Lipit-Ishtar (ca. 1930 BGC, city of Isin) include a similar mix of prices for goods and bads.[1]

This expansive, written price regulation was profoundly important to its authors.  The epilogue to the Laws of Lipit-Ishtar declares:

he who does anything evil to it [the represented Laws], who damages my work, who enters the treasure room, who alters its pedestal, who effaces this inscription and writes his own name (in place of mine), or, because of this curse, induces an outsider to remove it -- that man, whether he is a king, an enu-lord, or an ensi-ruler ... [May the] primary son of the god Enlil, not approach; may the seed not enter; ... [May] the god Enlil ... revoke the gift of the lofty Ekur temple.  May the god Utu ... make his cities into heaps of ruins.[2]

These explicit, elaborate concerns for ownership of laws are conventional in epilogues to ancient Mesopotamian laws.  The epilogue to the Laws of X (written sometime between 2050 and 1800 BGC) includes similar language, as does the epilogue to the Code of Hammurabi.

The prices declared in ancient Mesopotamian laws were meant to last forever.  The Code of Hammurabi makes this goal explicit:

May any king who will appear in the land in the future, at any time, observe the pronouncements of justice that I inscribed upon my stela.  May he not alter the judgments that I rendered and the verdicts that I gave, nor remove my engraved image.  If that man has discernment, and is capable of providing just ways for his land, may he heed the pronouncements I have inscribed upon my stela, may that stela reveal for him the traditions, the proper conduct, the judgments of the land that I rendered ... If that man (a future ruler) heeds my pronouncements which I have inscribed upon my stela, and does not reject my judgments, or alter my engraved image, then may the god Shamash lengthen his reign

At least formally, Hammurabi was quite successful in projecting his authority forward in time.  The Code of Hammurabi was studied and recopied for at least fifteen hundred years.[3]

Prices for bad acts differ significantly from price for goods important in ordinary life.  In a law such as "If a man commits a murder, that man must be killed," the price for murder has a readily understood correspondence and symmetry.   Prices for ordinary goods, such as a bushel of barley, lack such correspondence and symmetry.  Not surprisingly, the price of barley 4000 years ago in Mesopotamia is much less related to current prices for food than the ancient Mesopotamian price for murder is related to current prices for murder.

Moreover, prices for bad acts are relevant only in abnormal circumstances, while prices for goods important in ordinary life enter in daily transactions.  Hence the cost of regulated prices not responding to relevant changes in circumstances is much less with respect to bad acts than with respect to common goods.   Observed prices for common goods in Babylon from 385 to 61 BGC show large variations.[4]  For example, the price of a cubic meter of barley in kilograms of wool had an interquartile range of 9.4 kg to 18.9 kg in Babylon from about 382 to 71 BGC.  Extreme variations were much wider (see graph below).  If the prices that Babylonian kings set for common goods had been practically important and enduring, they would have greatly harmed ordinary life.   That's not true for the prices that the kings set for bad acts.

(underlying price data)
Concern for common welfare and justice motivates governments to enact criminal laws.  Concern for common welfare and justice has also throughout human history have motivated governments to regulate prices for ordinary goods.  Criminal law typically has low cost and high popular support, and the effects of bad prices for crimes often are not obvious.   Price regulation for common goods typically has high cost and can rapidly lose popular support.  The implications are important but counter-intuitive: changes in government price regulation are much more likely to be consistent with common welfare and justice in the long run.  Common circumstances of human life regulate government regulation of goods' prices much better than they regulate criminal law.

Notes:

[1] English translations of these laws can be found in Roth, Martha Tobi, Harry A. Hoffner, and Piotr Michalowski (1995), Law collections from Mesopotamia and Asia Minor (Altanta, Ga.: Scholars Press).  For a compilation of wages and goods prices from the Code of Hammurabi, see Godfrey Rolles Driver and John C Miles (1952), The Babylonian Laws: Ancient codes and laws of the Near East (Oxford: Clarendon Press) v. I, p. 476.

[2] This and the following quotation are from the translation in Roth, Hoffner, and Michalowski (1995). The "lofty Ekur temple" was a temple to Enlil in the sacred city of Nippur.

[3] See Babylonian Law.  About 1200 BGC, about 500 years after the Code of Hammurabi was written, an Elamite king Shutruk-Nahhunte took as plunder a stela displaying Hammurabi's code.   He brought the stela back to his kingdom in Khuzestan, Iran.  That stela is currently on display at the Louvre Museum in Paris.

[4] For a detailed discussion of these prices, see R.J. van der Spek, Commodity Prices in Babylon 385 - 61 BC.  Mr. van der Spek has made his convenient compilation of the data freely available on the web.  I am grateful for his generous contribution to world knowledge.

Tags: ancient Mesopotamia, code of hammurabi, goods, law, prices

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In an infoworld article entitled "Government policies add to Japan's broadband success," Grant Gross led with this news:

A wide-ranging government policy on broadband and healthy competition among providers gives Japanese customers greater speeds at a much cheaper price than U.S. customers pay, a Japanese telecom executive said Wednesday.

Japanese customers pay about US$0.70 for each megabit per second of bandwidth, compared to $4.90 per megabit on average in the U.S., said Takashi Ebihara, senior director of the corporate strategy department at NTT East Corp. and a visiting fellow at the Center for Strategic and International Studies, a Washington, D.C., think tank.

In an article in Silicon Valley Watcher, Richard Koman had a similar article headlined, "Why broadband is 5x cheaper in Japan." Government policy is undoubtedly extremely important for the communications industry (and government bureaucrats deserve much more credit than they usually receive). A comparison between U.S. and Japanese bandwidth prices can be easily used to support conventional views about government policy and competition. Such a comparison can also be ignored if more convenient for a particular point of view.

Ebihara's presentation was much more interesting than these news reports indicate. Ebihara actually compared bandwidth prices across twelve countries. Moreover, he cited a source for the data quoted above. His source was ITU Internet Reports 2005.[1] The table below includes all the relevant data given in that source. Thinking about policy and competition with respect to this set of countries and the range of prices that exists suggests that bandwidth prices are not strongly correlated with objective industry structures.

Internet Access Prices Per Megabit

Country or Region	US$ Per Megabit
Japan	0.70
Korea (Rep.)	0.80
Taiwan, China	1.80
Iceland	2.00
Sweden	2.50
United States	4.90
Netherlands	7.30
Finland	7.30
Hong Kong, China	8.30
Canada	10.50
Macao, China	11.60
Belgium	12.20
United Kingdom	13.50
Singapore	15.90
Israel	32.50
Denmark	32.70
Switzerland	33.50
France	36.70
Norway	62.60
Austria	65.10
Source: ITU Internet Reports 2005

NTT's current broadband service prices do not have a consistent bandwidth price level. ADSL has a price per megabit about three times higher than the price per megabit for Fiber To The Building (FTTB -- used for multi-tenant buildings). Fiber to the Home (FTTH) is about two-thirds more expensive than FTTB. NTT's ISDN, on a per megabit basis, is about two thousand times more expensive than its FTTB.

Current NTT Internet Access Services

Access Service	Nominal Bandwidth	Price (JPY)	Equiv. Price USD	USD per Mbps
FTTH	100	6,700	57	0.57
FTTB	100	3,950	34	0.34
ADSL	47	5,590	48	1.02
ISDN	0.064	5,200	44	687.50
Source: Ebihara presentation, p. 10

Bandwidth is more meaningful as a technical characteristic of a widely available service than as a good that users individually purchase. Most communications service users have little understanding of the concept of bandwidth. Most communication service providers do not guarantee the bandwidth of services purchased, nor define clearly what the nominal bandwidth of the service means. Moreover, the bandwidth of a "connection to the Internet" is no more meaningful than the bandwidth of a "connection to connections".

A communications service business can be insightfully divided into two important activities. Building more capable communications networks and migrating users to them is one important activity for a communications business. In Japan, that is what NTT has done in shifting subscribers from ISDN to ADSL and then to fiber. Acquiring funds is another important activity for a communications business. Prices per megabit do not provide a good connection between these two aspects of a communications business.

OPLANs provides a useful alternative perspective on bandwidth prices. OPLANs emphasizes charging for access, not bandwidth. Thus an OPLAN is meant to be:

a network of truly ‘broadband’ capacity - i.e. where the bandwidth capacity is dictated by nothing other than physical characteristics of the deployed technologies [2]

With an OPLAN, users get to use as much bandwidth as they can. With modern fiber optics, that's very high speed without any price. Moreover, that doesn't depend on any particular national government policy, nor depend on competition.

Notes:

[1] See Taka Ebihara, Understanding the Japanese Broadband Miracle, p. 6, citing ITU Internet Reports 2005, p. 15.

[2] Malcolm Matson, "So What is an OPLAN?"

Tags: bandwidth, comparisons, imagination, Japan, OPLAN, prices

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