I. Introduction
This article analyzes a large collection of commercial records from the earliest well-documented long-distance trade in world history: the Old Assyrian trade network connecting northern Iraq, northern Syria, and central Turkey during the Middle Bronze Age (c. 2000–1650 BCE). The clay tablets on which the merchants recorded their shipment consignments, expenses, and contracts excavated, translated, and published by researchers for more than a century paint a rich picture of an intraregional exchange economy (Larsen 2015).
Originating from the city of Aššur on the west bank of the River Tigris, some 100 km south of the modern-day Iraqi city of Mosul, several hundred Assyrian merchants settled on a permanent or temporary basis in Kaneš (Kanesh) near modern-day Kayseri in Turkey. They maintained smaller expatriate trading settlements in a few dozen urban centers on the central Anatolian Plateau and in the Trans-Taurus. Kaneš was the regional hub of the overland commodity trade involving the import of luxury fabrics and tin from Aššur to Anatolia (tin originally sourced from Central Asia) in exchange for silver and gold bullion (Barjamovic 2018). Assyrian merchants were also involved in a voluminous trade of copper and wool within Anatolia (Dercksen 1996; Lassen 2010).
The Assyrian texts depict a flourishing market economy, based on free enterprise and private initiative, profit-seeking and risk-taking merchants, backed by elaborate financial contracts and a well-functioning judicial system (Hertel 2013). Aššur offered reliable legal procedures, a transparent system of taxation, and foreign policy that protected the Assyrian caravans and local investors involved in financing the risky long-distance trade. Assyrian merchants established trading colonies or “ports” among the small city-states of Anatolia. They negotiated with local Anatolian rulers, kings, or ruling couples the right to establish permanent trading settlements and maintain their legal and financial institutions independent from the local community. Local rulers guaranteed protection for passing merchant caravans against robbers and brigands, and maintained roads and bridges in exchange for tolls and taxes on transit trade.
Our first contribution is to extract systematic information on commercial linkages between cities from ancient texts. To do so, we leverage the fact that the ancient records we study can be transcribed into the Latin alphabet and digitized. We parse these texts and automatically isolate all tablets that jointly mention at least two cities. We systematically read those texts, which requires an intimate knowledge of the cuneiform script and Old Assyrian dialect of the ancient Akkadian language in which the records are written. Taking individual source context into account, this analysis identifies exclusively a subset of records that explicitly refer to trades between cities.
Our second contribution is to estimate a structural gravity model of ancient trade. We build a simple Ricardian model of trade. Our model makes predictions on the number of transactions between city pairs, which is observed in our data. Further imposing that bilateral trade frictions can be summarized by a power function of geographic distance, the model can be estimated solely on bilateral trade flows and the geographic location of at least some known cities. We estimate a distance elasticity of trade in the Bronze Age equal to 1.9, surprisingly close to modern estimates.
Our third contribution is to use the structural gravity model to estimate the geographic location of lost cities. While some cities in which the Assyrian merchants traded have been located and excavated by historians and archaeologists, other cities cannot be definitively associated with a place on the map and are now lost to us. Analyzing the descriptions of trade routes connecting the cities and the landscapes surrounding them, historians have developed qualitative conjectures about potential locations for these lost cities. We propose an alternative, quantitative method based on maximizing the fit of the gravity equation. As long as we have data on trade between known and lost cities, with sufficiently many known compared to lost cities, a structural gravity model is able to estimate the likely geographic coordinates of lost cities. Our framework provides not only point estimates for the location of lost cities but also confidence regions around those point estimates. For a majority of the lost cities, our quantitative estimates come remarkably close to the qualitative conjectures produced by historians, corroborating both such historical models and our purely quantitative method. In some cases where historians disagree on the location of a lost city, our quantitative method supports the conjecture of some historians against others.
Our fourth contribution is to propose an explanation for the size distribution of ancient cities: cities that are centrally located in the transportation network, determined solely by the topography of the wider region, tend to be large. Our general equilibrium gravity model yields a structural estimate for the fundamental economic size of ancient cities, when no reliable data on production and consumption, or even population size or density in the nineteenth century BCE survives. We show that natural transportation networks—a factor usually overlooked by economists, but recognized by historians (Ramsay 1890)—are critical in explaining the hierarchy of ancient city size estimates. We provide evidence that the city size distribution is persistent over millennia, with estimated ancient city sizes strongly correlated with the economic size of those cities in the current era. Finally, we find suggestive evidence that the distribution of population of ancient urban settlements is closely approximated by Zipf’s law, much like the distribution of modern city sizes.
I.A. Related Literature
Our article contributes to several literatures. First, we provide the earliest estimate of the gravity equation in trade, dating back to the nineteenth century BCE, about four millennia earlier than existing estimates from the mid-nineteenth century CE, and with a distance elasticity of trade close to modern estimates (Disdier and Head 2008; Cosar and Demir 2016).
Second, we invert a structural gravity equation to locate lost cities, complementing qualitative approaches in history and archaeology with a quantitative method rooted in economic theory. Our approach is loosely related to multidimensional scaling problems in other fields, where one searches for (unknown) coordinates of points such that the distances between those points are close to known distances. Multidimensional scaling has been applied, for instance, to locate eight parishes in Oxfordshire using data on marriages circa 1600–1850 CE (Kendall 1971) and to match known archaeological sites to place names in Norway using night watchmen itineraries in the thirteenth century CE (Galloway 1978). An earlier contribution (Tobler and Wineburg 1971) uses a similar data set as ours to locate Assyrian cities in Bronze Age Anatolia. Our method differs from and improves on multidimensional scaling in that we use an explicit structural economic model. This allows us to infer not only the location of lost cities but also the distance elasticity of trade, the size of cities (a theory-guided counterfactual measure), formal estimates of standard errors, and two-dimensional confidence regions. Furthermore, compared to Tobler and Wineburg (1971), we use a much larger data set that has become available for study in the meantime, systematically clean our data to identify meaningful economic exchanges, formally account for trade zeros, and compare our estimates to historical and contemporaneous evidence. We also show that our structural estimates yield more plausible estimates than multidimensional scaling, even using the same data.
Finally, we provide novel evidence on the (very) long-run determinants of the city size distribution. An important line of theoretical and empirical inquiry in economic geography involves attempts at explaining the distribution of economic and demographic size of cities over time. Locational fundamentals as dictated by geography are potentially an important factor (Davis and Weinstein 2002). Agglomeration of economic activity for nongeographic reasons may magnify size differentials even across seemingly homogeneous locations (Krugman 1991). Path dependence through lock-in effects could lead to the persistence of past factors—related to the fundamentals that may have been important once (Bleakley and Lin 2012; Michaels and Rauch 2018). Our results and historical setting suggest that centrality in the transportation network, shaped by the topography of the land, is an important geographic factor explaining the hierarchy of city sizes.
The remainder of the article is organized as follows. Section II describes our data. Section III derives our model and estimation strategy. Section IV discusses estimates for the distance elasticity of trade and the location of lost cities. Section V presents our estimates for city sizes and explores the determinants of the distribution of ancient city sizes. Section VI compares the structural gravity model to estimates from a naive gravity model.
II. Ancient Trade Data
Our data come from a collection of around 12,000 texts that constitute the hitherto deciphered and edited part of around 23,500 texts excavated primarily at the archaeological site of Kültepe, ancient Kaneš, located in Turkey’s central Anatolian province of Kayseri. These texts were inscribed on clay tablets in the Old Assyrian dialect of the Akkadian language in cuneiform script by ancient Assyrian merchants, their families, and business partners. Figure I shows a picture of a well-preserved clay tablet.1 The texts date back to a period between 1930 and 1775 BCE, with around 90% of the sample belonging to just one generation of traders, c. 1895–1865 BCE (Barjamovic, Hertel, and Larsen 2012).
Figure I
Image may be NSFW.
Clik here to view.![Tablet Kt 83-k 117]()
Clik here to view.
Tablet Kt 83-k 117
We thank Fikri Kulakoğlu for permission to use the photo of this tablet.
Since Kaneš was home to the main expatriate court adjudicating on disputes within the Assyrian commercial activities in Anatolia during that time, major Assyrian merchants maintained houses and commercial storage in the city. The merchants settled at Kaneš typically acted both as agents of larger trading houses in the mother city of Aššur, as well as partners in local trade ventures. This required them to keep records on trade endeavors throughout their commercial circuit, regardless of whether it involved Kaneš. Such records were largely archived at Kaneš alongside dossiers of legal and commercial records coming from elsewhere within the network and archival copies of texts going out to other cities in Anatolia. To some degree, this alleviates any geographical bias of the sources and the commercial geography that they reflect.
The city of Kaneš experienced a major conflagration that destroyed all Assyrian merchant houses and sealed off and preserved many of the commercial archives in situ c. 1840 BCE (Manning, Barjamovic, and Lorenzen 2017). This is the main reason the material, which represents the world’s oldest consistent archive of trade data, survives to this day. Unlike papyrus, paper, or parchment, clay is ubiquitous, inexpensive, and preserves well in the ground, so the Kaneš archives survived where most other materials would have perished. The closest comparable corpora of ancient trade data are almost 3,000 years later, coming, for example, from the medieval Italian merchant archives and the Cairo Genizah.
Most texts under consideration, found in merchants’ houses, are commercial: business letters, shipment documents, accounting records, seals, and contracts. In a typical shipment document or expense account, a merchant would inform partners about the cargo and related expenses:
(I paid) 6.5 shekels (of tin) from the Town of the Kanishites to Timelkiya. I paid 2 shekels of silver and 2 shekels of tin for the hire of a donkey from Timelkiya to Hurama. From Hurama to Kaneš I paid 4.5 shekels of silver and 4.5 shekels of tin for the hire of a donkey and a packer. (Tablet AKT 8/151, lines 5–17)In accordance with your message about the 300 kg of copper, we hired some Kaneshites here and they will bring it to you in a wagon... Pay in all 21 shekels of silver to the Kaneshite transporters. 3 bags of copper are under your seal... Here, Puzur-Aššur spent 5 minas of copper for their food. We paid 5 2/3 minas of copper for the wagon. (Tablet Kt 92/k 313, lines 4–8, 14–22)
Occasional business letters contain information about market and transport conditions:
Since there is a transporter and the roads are dangerous, I have not led the shipment to Hutka. When the road is free and the first caravan arrived safely here, I will send Hutka with silver. (Tablet POAT 28, lines 3–7)Concerning the purchase of Akkadian textiles which you have written about, since you left the Akkadians have not entered the City; their land is in revolt, but should they arrive before winter, and if it is possible to make purchases profitable for you, we shall buy some for you. (Tablet VS 26/17, lines 4–11)
While the actual cuneiform tablets are scattered all around the world in collections and museums, many of the texts have been transliterated into the Latin alphabet, translated into modern language, published in various volumes, and recently digitized. We use qualitative and quantitative information about cities and merchants mentioned in a sample of 9,728 digitized texts available to us and approximately 2,000 additional nondigitized texts.2
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