Ancient Rome Stock Exchange Is a Myth

MANUELA GERANIO, IN A PAPER WITH GEOFFREY POITRAS, SHOWS THAT MODERN CLAIMS OF THE EXISTENCE OF A MARKET FOR SHARES OF THE SOCIETATES PUBLICANORUM IN THE LATE ROMAN REPUBLIC ARE NOT SUPPORTED BY PRIMARY SOURCES

The modern concept of corporation is generally considered to date back from the English East India Company, established in 1600, but we have to wait another couple of years and the Dutch East Indies Company for a company chapter including conditions for the transfer of shares. Recent claims of trading in shares (partes) of tax-farming corporations (societates publicanorum) in the late Roman Republic can thus raise some skepticism.
 
In Trading of Shares in the Societates Publicanorum? (in Explorations in Economic History, Volume 61, July 2016, pp. 95-118, doi: 10.1016/j.eeh.2016.01.003) Geoffrey Poitras (Beedie School of Business, Simon Fraser University) and Manuela Geranio (Department of Finance, Bocconi University) show that the claim is farfetched: “Upon closer inspection there is only brief discussion of possible share trading in a few sources that, in turn, depend fundamentally on a debatable interpretation of the commercial and legal context”.
 
The location of the proto-stock-exchange near the temple of Castor results, for example, the fruit of “romanticized descriptions”, while the primary source given in support, Plauto’s Curculio, “does not provide substantive evidence”.
 
The authors clarify that the tax-farming activity required less capital than assumed until now, and when substantial amounts of money were needed, not share trading but “a network of sub-partnerships involving socii in the main societas was the appropriate legal approach (...). Though some joint ownership of organizational assets by socii is evident – including slaves used as tax collectors – the individual socii were owners of such resources, not the corporate personality of the societas”.
 
Furthermore, according to secondary sources, bidding for tax-farming contracts was restricted to a tiny fraction of the population (the equites, sometimes estimated in only 730 people), which scarcely calls for a trading market, and the main sources of Roman law (Gaius’ Institutes and Justinian’s Digest – admittedly from the later Imperial period), don’t include any hint at possible disputes arising from share trading.
 
“The paper contributes to the wider ongoing debate on the historical relevance of the market economy, highlighting the need for more careful historical and legal analyses before concluding about the existence of its peculiar institutions in ancient times”, Prof. Geranio comments. 

by Fabio Todesco