Banking in Ancient Rome22/11/2023
Personal Purpose and the Eightfold Path of Possibility pt. 129/11/2023
Elite Members of Roman Society
Last week’s blog about banking in ancient Rome highlighted the diverse financial activities that captivated the attention of two distinct groups: the elite members of society and professional money dealers. This week learn more about the elite members of Roman society.
The patricians, or landowning elite that monopolized the political and social life of the Roman state, derived its large income from estates and political functions, but also from their financial activities. Seneca, a famous philosopher and statesman liberally describes a fortunate man as one who was “sowing and lending a lot”. On the one hand, awareness of their ranks and dignity in society prevented them from specializing in the economic field no matter how lucrative it was. On the other hand, business was bringing profits that most could not resist.
Through the system of patronage, the Roman elite was able to advance funds to their slaves, freedmen, and other clients, both for personal and business purposes, without being compromised. The sums advanced to slaves and freedmen were called “peculium”. “Peculium” was usually a small amount which became a founding capital for many businesses and most likely most of the small ones. If everything went well, the slaves were able to repay their debts, buy freedom, and retain the business for themselves. To gain access to these business opportunities that the patronage system made available, some people actually sold themselves into slavery for it. Business advances to their “clients”, of which the closest were termed “amici” or friends” were called “gifts” although they were actually investments, that is, extensions of credit that required payment. The patronage system was actually an explanation why so many businesses in ancient Rome belonged to slaves and freedmen.
For conducting various business enterprises, the Roman businessman could form a legal business partnership “societas” to allocate risks and profits. “Societas” was a business association in which partners own and control business together, thereby sharing profits and losses. Liability in “societas” was joint and unlimited for all partners forming “societas” which is why “societas” tended to be limited to a few participants who trusted one another. Also, the partnership automatically ended if a partner died, bankrupt, or renounced is partnership. These were the reasons why “societas” was generally not suitable for large-scale ventures.