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

INDUSTRY STRUCTURE AND INCOME OPPORTUNITIES 161

done by others. Where the individual’s contribution was not central to the

buyer’s decision, expansion was possible but only for workshops with barriers

to entry.

Some manufactures are endowed with barriers to entry through geography

or official regulation. Pantaenetus’ ore refining business is an example of the

former. In such a business there would be a significant benefit in being first to

establish an operation near a particular mining site; new entrants would find

it hard to attract customers once local relationships had been established.^60

A  logical industry structure would consist of a number of local monopolies

with their boundaries roughly defined as a function of transport costs. Pricing

would be constrained to the level above which customers would choose to

ship the product further afield or process it themselves. Some agricultural

activities such as contract olive oil pressing would have had similar economics.

An industry in which large firm size might have resulted from official regu-

lation is tanning. Tanneries are dirty and smelly and contaminate water supplies.

One decree constrains their location relative to a temple in rural Attica (IG

i^3 257).^61 In Athens, they were almost certainly not allowed to operate within

the city walls. The first few entrepreneurs to establish themselves in prime sites

outside the wall, at a location with plenty of water and conveniently placed for

customers, would leave no scope for newcomers. Similar considerations might

have applied to the dyeing and fulling of textiles, although evidence is scant

for Classical Athens.

In addition to barriers provided by location or regulation, barriers to

entry can also stem from competitive advantage in product differentiation

and branding. Here, we might consider three examples: (1) the shield fac-

tories of Lysias and Polemarchus and of Phormio (which, as noted previ-

ously, might be the same factory); (2)  the workshops of knife-makers and

(3) furniture-makers belonging to Demosthenes’ father. As noted, each shield

took six to eight people three days to make, much of which involved four of

them walking around a lathe. If Lysias is not exaggerating, his factory must

have employed at least fifteen teams; even if he is, it might be ten or more. In

knife-making and furniture production the Demosthenes brand must have

been able to capture significant market share.^62 It seems reasonable to posit

that this ability to win more share than was required to occupy a single pro-

duction chain was due to product preference  – shields were supposed to

save one’s life, so it was sensible to buy from the best workshop, the quality

of knives matters and the very notion of luxury furniture involves product

preference. New entrants would find it hard to persuade customers to take

a chance with an unknown product. Although it is harder to speculate on

how labour was divided in the Demosthenes family workshops, it is likely

that they worked in teams like the shield makers or Xenophon’s shoemakers

(Cyr. 8.2.5).