The following post comes to us from Andreas M. Fleckner, Senior Research Fellow, Max Planck Institute for Comparative and International Private Law.
How did the Romans finance capital-intensive endeavors such as the erection of temples, the pavement of roads, or the trading of goods from foreign countries? This question has fascinated generations of classical readers and scholars. It is, however, also of interest to the corporate lawyer of today, because Ancient Rome helps us better understand the functions of corporate law and its role within the broader economic, social, political, and legal setting.
What We Know About Ancient Rome
For more than 175 years, historians, economists, and lawyers have speculated or even claimed that, as early as the Roman Republic (6th to 1st century BC), businessmen formed large firms with publicly traded shares similar to modern stock corporations (since Orelli, 1835). Most recently, a longer Journal of Economic Literature article argues that there was evidence for such an “early form of shareholder company” (Malmendier, 2009).
In a new book, however, I conclude that such claims are unwarranted. [1] I consider all legal and literary sources, both in Latin and classical Greek, that have come down to us, such as the works of Polybius (2nd century BC), Cicero (1st century BC), Livy (around the time of Christ’s birth), Pliny the Elder (1st century AD), or Plutarch (2nd century AD), as well as great collections like the New Testament (1st/2nd century AD) or the Digest (6th century AD). None of these sources brings to light evidence for larger “capital associations” (my term for entities that helped finance projects which, on account of their scope, duration or risk, exceeded the capacity of single individuals), let alone associations with publicly traded shares.
