The Keynesian and Monetarist Policy of Alexander the Great

Archaeological evidence shows that interest rates for business loans hovered around 30% in the ancient world. Gold and silver currency were hard to find and many merchants had to trade goods for other goods. Just think how hard the life of an ancient merchant was without good and widely accepted coins. Instead of using money to pay for his items, the merchant would have to carry goods (say, cereal) and then trade such goods for his new merchandise (say, pottery) somewhere else. Obviously, this involved having to carry heavy goods in horse-pulled wagons both ways. This changed after Alexander’s conquests.

Perhaps without intention, Alexander the Great was a revolutionary in economic policy. After capturing an enormous quantity of gold and silver talents from the Persian Empire, Alexander the Great sponsored temple reconstruction, road building, monuments and art. This was a Keynesian policy in the style of an ancient conqueror! However, Alexander also implemented a monetarist policy, issuing huge amounts of gold and silver coins, which lowered interest rates from 30% to 6%. This differed from the Persian policies regarding currency, since they preferred to accumulated gold and silver in huge reserves in their treasuries. Money went from treasury keepers to the business men. City-states however had to borrow at slightly higher interest rates, perhaps because lenders were afraid that city governors (which at the time could control small armies) would refuse to pay unless by force.  Entrepreneurs in trade, art and construction projects benefited from the new coins issued by the Hellenes all over the Western Asia and the Middle East. Artists and builders could get funding for their projects. Merchants found currency easily available to buy their merchandise in other countries, without pulling heavy wagons with goods on their way, which saved their troubles for at least half of the path. A new age of Hellenistic art and economic prosperity started.

Of course, anti-cyclical policy or concerns about unemployment or potential GDP were far from Alexander's concerns. His reign coincided with a big increase in expenditures, because he had a concern for grandiose projects. The increase in money issue was certainly only driven for two reasons: one, to finance his expenditures in military (Alexander had to repay a big debt inherited from his father Phillip II's Persian expedition preparations) and big monuments, and second, because new coins were a good way to celebrate the glorious events of a new reign. Still, in ancient times just as now, monetary expansion has an inflation cost. Historical evidence shows that in cities such as Tyre, Gaza and Babylon, there was an increase in prices, perhaps by twice as much, and the economic boom ended in a recession. However, the economy and trade did boom back again after the Diadochi conflicts subsided into a relatively more peaceful era.

The Ancient Greek diaspora spread over half of Eurasia: Greek India in the time of Buddha and Jesus

A nation of merchants left the Aegean and reached the edges of the ancient world, from the mouth of the Tagus in Portugal to the cliffs of the Himalayas in northern India and the borders of western China. These remote communities were almost forgotten by Greek historians. Who would guess that the Indo-Greek kingdom remained an influent and independent state for almost two centuries after Greece became a mere Roman province? How many of us know that the first images of the Buddha were Greek? Immigrant nations – often seen as weak, impure and degraded versions of their metropolis – outlive their parents!

The Mediterranean and Black Sea were the first playing grounds of the Greeks, who settled colonies in Asia Minor, Crimea, Cyprus, Sicily, southern Italy, eastern Spain, south France and even Libya. The ancient Greeks would trade with their original cities and keep strong ties with their international community, including the worship of the same gods and traditions. They even reached the mouth of the river Tagus, the most western point in Europe, where a strong Greek community existed in the city of Olisipo which would become modern Lisbon. Historians debate who founded Lisbon, perhaps either Phoenician or Greek traders. Greeks and Romans believed the city was founded by Ulysses during his travels, but some think Olisipo was a Phoenician-influenced name and that later Greek colonists who arrived at this city misinterpreted the name as part of their mythical traditions. The name of Olisipo was later abbreviated to Lisbon after the Islamic occupation, but its original Greek-Phoenician name is still in use in cultural circles: when buying books you often read on the first page the editorial details as “published in Olisipo”. Lisbon is a city prone to earthquakes and floods from the river and ocean who bath it. It is a city on top of many older cities. The left pic below shows Roman ruins underground in Lisbon.

Even more splendid than the Mediterranean expansion were the Hellenistic kingdoms in Egypt, Persia and India, which followed the expedition of Alexander the Great. However, there were already many Greeks living in Persia before Alexander. Persians brought Greek slaves from their territories in Asia Minor, many of whom worked as artisans and goldsmiths. Often these slaves were forced to live with mutilated bodies, since their masters would cut a body-part such as a nose, hand or limb in order to make their escape more difficult and so that they would be recognized as runaway slaves.

The picture on the right shows a Greek influenced Persian gold cup from 400 BC. This object is a rare item, since gold can be melted and few such antiques survive. This cup inspires me with the feeling that such beautiful artworks were the only joy their unhappy creator knew.

After Alexander’s death Hellenistic kingdoms were founded in Pergamum, Ptolemaic Egypt and Seleucid Persia. There were large Greek populations in big cities such as Alexandria, Antioch and Seleucia-on-the-Tigris. However, these three brilliant kingdoms were exhausted in wars against each other and with Rome. By 129 BC Rome had reduced Greece and Pergamum to mere provinces and the Seleucid Empire had lost almost all its territory to the Parthians, being reduced to a few cities in modern Syria. Ptolemaic Egypt ended when Cleopatra and Mark Antony committed suicide in 30 BC after losing the Roman civil war.

All the political and family intrigues of the Seleucids, Ptolemais, Attalids of Pergamum, ancient Macedon and the Greek cities are detailed by the Roman historians. Roman and Greek historians wrote little about the Greco-Bactrian (in Afghanistan) and the Indo-Greek (in Pakistan-North India) kingdoms. These two remote kingdoms were described by Roman historian Justin as “the extremely prosperous Bactrian empire of the thousand cities”, and expanded as far as Uzbekistan and western China. The pics on the sides show a Greek influenced Chinese vase and a wool tapestry representing Greek soldiers from around 220-200 BC found in the Chinese city of Urumqi.

The Greco-Bactrian kingdom initially included the Greek colonies in both Afghanistan and Pakistan. It lasted from 250 BC to 120 BC, when a central Asian nomad people, the Yuezhi, occupied Afghanistan as they escaped from wars in China. After some internal disputes between Greek generals there was also an independent Indo-Greek kingdom in northern India, which lasted from 190 BC to 20 AD. The Indo-Greeks thrived in cities such as Alexandria on the Caucasus, Alexandria in Arachosia (modern Kandahar), Taxila and Gandhara. Below I show the ruins of Alexandria in Arachosia and a Greek sculpture from Alexandria on the Caucasus.

The most famous Greco-Bactrian kings were Demetrius I and Menander I, who were undefeated in war and were often compared to Alexander the Great. Eucratides I was another famous Greco-Bactrian king, who ruled for several decades and issued very good currency, including the largest gold coin ever found from antiquity, as seen in the pic below.

The capital of Eucratides was Alexandria on the Oxus (the current site of Ai-Khanoum) and its ruins located between the rivers Oxus and Kokcha are very well preserved. This capital founded by some soldiers of Alexander which were perhaps too tired to pursue his Indian campaign had every trace of a great Greek city within its great walls and fortress towers, including classical temples, a palace, a theater, and even a gymnasium, as seen in the pics below.

Menander I (ruled from 155 to 130 BC) became a patron of Buddhism and an important Buddhist work, the Milinda Panha (“Questions of Milinda”) portrays him as a wise man, who knew philosophy and many sciences besides war. Roman historian Plutarch reports that Menander I was so popular that its ashes were divided among several Indian cities, placed under sacred shrines in the same way as the Buddha. In fact the Greeks were extremely important for Buddhism. The first human representations of the Buddha appeared in the Greek cities of India around 130 BC, right after Menander’s death. Before then the Buddha was represented by symbols such as the Dharma wheel or a Palm Tree as in this coin issued by the Indo-Greek king Menander. The other pic shows a 2nd century BC Buddha from the city of Gandhara, where a strong Greek community embraced Buddhism and expressed this religion with Hellenized art forms.

The Indo-Greek kings started losing power as new peoples such as the Sakas and the Yuezhi (which would found the Kushan Empire in northern India) pressed from the north after 70 BC. There are few written stories from such period, but fortunately for us there are plenty of Greek coins until 20 AD. These coins often show that Greek kings such as Hermaios and Saka or Kushan kings in the same coin. Some think this shows that Greek kings and the new nomad settlers shared power for several decades and ruled India jointly. Other historians think that this simply shows that the new Kushan kings admired the Greek civilization and wanted to be seen as worthy successors of those wise rulers. In fact the Kushan kings used Greek language for their administration and currency until 127 AD, one century after the last Greek king existed in India. Below I show a coin of Greek king Hermaios and the first Kushan king, Kujula Kaphises.

Gandhara was a center of Greek influenced Buddhism until the end of the Roman Empire. Below there are sculptures of Buddhist gods on the left from the 3rd century AD and a Bodhisattva on the right from the 4th century AD, which show a clear influence from Greek-Roman art of the time. Therefore a vibrant Hellenic community lasted in India at least four centuries after Christ.

The most expensive funeral in history: Alexander of Macedon mourns his dearest friend Hephaestion

Novels and movies perhaps fall too easily into the temptation of over-romanticizing Alexander the Great. In my view Alexander was both a tyrant and a hero of the ancient world. He was clearly a tyrant, since in India and Tyre the Macedonian army committed massacres that would be considered genocidal by modern standards. Paradoxically Alexander was also a hero of the ancient world, since he brought great wealth and authority to his followers. But of course that is only because ancient heroes were judged by their victories over others, not by saving children or by achievement in sports as in our modern times. Perhaps an attenuating factor when evaluating these atrocities is that Macedonians replicated the brutal war actions already present in the ancient world. In Persia there were Greek slaves working as artisans and these often had a body-part – such as a nose, hand or limb – cut from them in order to prevent their rebellion. The picture below shows a Greek influenced Persian gold cup from around 400 BC. This object is a very precious item. Since gold can be melted to form new objects (unlike marble sculptures), then few such artworks survive from antiquity. This beautiful cup inspires the feeling that perhaps the slave Greek artisan who made it lived an unhappy life and these artworks were the only joy he knew.

However, for all their brutality ancient men valued friendship and art in ways as strong as we do. In my view a defining moment in Alexander’s life was when Hephaestion passed away. Until then the conqueror had lived the life of an unbreakable hero, admired by the whole world. Who knows if perhaps at that moment Alexander felt vulnerable and mortal just like all men? Upon hearing of the deceasing of his best friend (or perhaps his lover, obviously we will never know), Alexander interrupts the celebrations organized for the return of his soldiers from India, orders the execution of the physician in charge (Alexander, the tyrant again…) and then mourns for two days next to Hephaestion’s corpse. When Alexander’s companions pull him away from the decaying body, the Macedonian king will begin the plans for what may have been the most expensive funeral rites in history. Alexander wishes to offer his friend a departure more dramatic and pompous than of any of the great kings. The pictures below show the busts of Alexander and Hephaestion.

Soon Hephaestion’s body is mummified and transported in a gilded coffin to Babylon. There Alexander requests a grand funeral pyre from architect Stasicrates, an endeavor which lasts six months. In an early spring dawn several thousands of Macedonian and other Hellenic soldiers who followed the expeditions of Alexander gather for the last goodbye. Decorated horses in golden clothes and painted war elephants face the silent men. In front rises a wooden palace some 60 meters tall and 200 square meters in area. The great building has seven floors, with each tier supported by gigantic wood columns carved with beautiful figures. Each detail sculpted as if to last forever and yet meant to burn in a single morning. The first story had 240 ships painted gold with red flags flowing in between. In the second one the columns resembled flaming torches surround by golden wreaths, serpents and eagles. Above mounted a hunting scene, towered by a battle of centaurs and mythological creatures. The fifth story was a golden jungle of lions, bulls and elephants, shining like planets in the dawning light. The next tier presented the arms of Macedon and Persian, while the seventh level bore sculptures of sirens with a hollow interior where women would chant in lament. On top of it all rose the sarcophagus of Hephaestion. Below I show artistic drawings of what Hephaestion’s funeral pyre might have looked like in a splendid morning plus the drawing of a decorated army elephant.

As the singers descended the stairs, still singing the funeral chants, the early sun was rising in the sky, when Alexander threw down his torch, followed by several of his men. It is easy to imagine the bonfire spreading through each step of the gigantic pyre, ascending upwards as a cataract of flames and smoke. The tower started to creak and as the heavy sculptures and columns would fall from high, eagles, lions, serpents, plunging in flames with a thudding noise. The heat, glow and sound reverberated in the distance until all became ash.

After the ceremony Alexander requests for the sacred flame of the temple of Babylon to be extinguished, an act reserved for the death of the great king himself. The funeral ceremony was followed by 15 days of celebration with a theater and music festival, besides a large arena where over 3000 athletes competed in sports and games. One must imagine the impact of such an event, since Hellene athletes of the time practiced sports almost naked. The audience must have seen ball games, wrestler and runners everywhere fighting for victory with their naked muscles. Below I show artistic images of athletic games and Dionysian music festivals.

Some estimate Hephaestion’s funeral to have costed the equivalent of 2.3 billion USD, similar as a Forbes billionaire burning its entire fortune to mourn a companion. Such was the emotion lived by Alexander and his companions in life. Of course, one may think that the pyramids of Egypt were more expensive tombs, however those were monuments meant to last forever and not merely a funeral rite. This funeral was extensively described by ancient historian Diodorus Siculus, but it goes unmentioned in several other ancient sources. Some modern historians, such as Robin Lane Fox, express some doubts about whether this funeral really happened or whether Diodorus was confused a crazy plan conceived by Alexander and that never really materialized. In my personal opinion I believe it is more likely that Diodorus was describing real events, although perhaps a bit exaggerated. After all Alexander was the wealthiest man of his age and often had no qualms about spending the money he pillaged during his invasions. One can even think that his expeditions to Afghanistan and Pakistan were merely the result of his wish to spend funds to gain more glory, since those were backward regions that his men really did not want to invade. Therefore why not believe that the Macedonian king would not have spent on a lavish funeral for a friend? More recently a gigantic tomb was discovered in Greece, which some people think could be the final resting place built for Hephaestion:

http://www.theamphipolistomb.com/   .