The Ancient Greek Economy. Markets, Households and City-States

INDUSTRY STRUCTURE AND INCOME OPPORTUNITIES 159

Mining is not like working with bronze or iron, for instance, where if

there is a large number of smiths their products become cheap and the

smiths are forced out of business. Likewise, when grain or wine is plen-

tiful, the price of the crop falls, working the land becomes unprofitable

and in the end large numbers of farmers abandon their work and become

traders or retailers or money-lenders instead.

With no way to attract customers other than price and no cost advantage

against other competitors, winning extra volume is difficult and costly; depend-

ing on it to make expansion worthwhile is high risk.^51

While potters and painters could differentiate their fine ware products if

they were good enough, there was no potential for competitive advantage in

coarse ware until the manufacturing technology changed. The industrial rev-

olution transformed the structure of the pottery industry by creating a totally

different cost structure and the potential to produce superior products at a

cost that made them accessible to many more customers. Heat control was

improved as underfloor flues and pyromatic beads made larger kilns possible;

processing innovations included coal fired kiln drying, the suspension of lead

oxides for dipping, novel slip casting techniques and a string-controlled wheel.

Steam power was used to grind glazes and turn the throwing wheel, and canals

brought in raw materials in bulk at a fraction of the costs of horse transport.

Josiah Wedgwood was looking at a very different cost-curve from an Athenian

potter. His factory’s ability to make highly decorated items to a standard spec-

ification at an affordable price developed a large new market for his products

among the aspiring middle class who were starting to enjoy the employment

and income benefits of the Industrial Revolution (Fig. 6.5).

Volume

Price set by

low tech cost

structure

Profits available

to high tech

producer

Low tech costs

Cost/Units

High tech cost

6.5 Wedgwood’s Economics