The ancient Egyptian economy:
Sources of wealth
Farming and fishing
Commerce and banking
The beneficiaries of the system
The upper class
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The ancient Egyptian economyThe economy of pharaonic Egypt has been called an ancient command economy, but one should always remember that such modern definitions are not as apt as one would hope for. Still, there was a specialized bureaucracy which monitored or controlled much of its activity, one of the hallmarks of planned economies. On the other hand, in general the officials—as state employees and not as private landowners or managers of state farms—probably did not tell farmers what to grow and these continued to do what their predecessors had done. But they remeasured and reassigned the land after every inundation based on past assignments, assessed the expected crops, collected part of the produce as taxes, stored and redistributed it to those on the state's pay lists. Storage and redistribution were generally done on a local basis. Regional facilities provided produce in case there was a shortfall in one of the local centres.
Bureaucrats were also in charge of public works which were mostly religious in character and involved at times tens of thousands of workers and administrators.
Egypt was a patchwork of mostly autarkic households and domains. After the taxes were paid, domain administrators and successful householders stored surpluses for future use or exchanged them by barter on the market, an institution the nature of which is remarkably badly understood. The percentage of produce and even manufactured goods which reached markets was probably small. It may have been of marginal importance to the survival of the individual producer, but provided part of the economic base for the developing Egyptian high culture.
Much of the trade beyond local exchanges is thought to have been in the hands of wholesale merchants acting for the crown or the great temple estates. The extent to which private individuals were involved in trading cannot be estimated. Market forces seem to have played a role above all during the periods when the administration broke down.
Major changes to the early barter system began to occur only with the influx of foreigners and the introduction of coined money in the Late Period. population, probably more than nine tenths during the first two millennia of Egypt's history, lived on the land  in mostly self sufficient village communities and, in early times at least, in a state close to serfdom. The land they worked belonged in theory to the gods, Osiris and after his demise to Horus and his earthly incarnation, the pharaoh. In practice a virtual ownership evolved, a development which culminated in the Late Period, when land could be freely bought and sold.
Apart from the tenant peasants, a large section of the population worked as farm labourers on the estates of noblemen and of the temples. During the New Kingdom perhaps a third of the land was in the hands of the Amen priesthood, with a proportionally large number of workers and slaves.
Administrators, priests, traders and craftsmen lived mostly in the cities along the Nile, which could be supplied with victuals relatively easily and cheaply by boat. Agriculture created most of Egypt's wealth. Grain, vegetables, fruit, cattle, goats, pigs and fowl were grown, and fish from the Nile were caught, and eventual surpluses, after deduction of the various taxes, were sold on the markets.
Thanks to the yearly inundations the soil remained fertile. But agricultural techniques were not very efficient. Improvements were rare, implements remained primitive and the breeding of better livestock was haphazard.
Pisciculture appears to have have existed on a very small scale. But practically all the fish consumed were caught in the Nile. Hunting, a leisure activity to the rich, and gathering played a small economic role over all, but may have been crucial to the survival of the poorest. linen. A sizable proportion of the grain produced was used for beer production. The fish caught by the men had to be cleaned and dried, which was generally done by women, to be of much use in the hot climate of Egypt, unless they were consumed immediately.
In the towns small factories appeared, often financed by rich noblemen: bakeries, breweries, carpentry workshops and the like with a few dozen employees. In these manufactories weaving, for instance, became a largely male occupation with the introduction of upright looms during the New Kingdom. mined were of little interest to anyone but a small number of rich people. Precious metals were not in general circulation until the Late Period and even then remained in the hands of few. The metals used for tools - copper, bronze and, from the Late Period onwards, iron - were expensive and the implements fashioned from them were beyond the reach of many. Poorer people continued to use stone and wooden tools for most purposes well into the Bronze and even beyond into the Iron Age. Gems too remained in the possession of a wealthy minority and the stone quarried for temples and tombs served the same class of people and profitted only the craftsmen involved in building.
Natron needed for the embalming process, was mined in the Wadi Natrun. Embalming was too expensive for all but a few.
Egypt, Retenu and Nubia: Major trade routes
Some of the wheat harvested and belonging to private owners was stored in state warehouses. So was much of the grain collected as taxes. Written withdrawal orders by owners of lots of grain were used as a kind of currency. These grain banks continued to serve growers and traders even after the introduction of coined money in the latter half of the first millennium BCE. Under the Ptolemies a central bank at Alexandria recorded all accounts of the granary banks dotting the country. Payments were transferred from account to account similar to the modern giro system. Credit entries were recorded with the owners name being in the genitive or possessive case and debit entries in the dative case.
Since the second half of the first millennium BCE gold, silver, and copper in specie were used mostly in dealings with foreigners, be they mercenaries or merchants.
High interest rates did not encourage commerce and during the first millennium BCE they may well have put Egyptian merchants at a disadvantage vis-á-vis foreign traders who were funded from abroad. During the Saite Period monthly interest rates could reach 10%. domesticated animals played an important role. The animals used in agriculture were donkeys for transporting produce and cattle for ploughing and other heavy work. Harnessing was inefficient. The yoke resting on the animals' shoulders was unknown, and the shafts of the ploughs were fastened to the horns of the cows.
Horses were introduced into Egypt during the Second Intermediary Period and never achieved economic importance. Expensive to keep, they were only employed by the aristocracy and the military for pulling chariots and later for riding. Vehicles with light spoked wheels came into use during the New Kingdom and served mostly for warfare and sport. Anything transported by land, even in arid desert regions, was either carried by humans or donkeys, or dragged on wooden sledges.
Fire was needed for cooking and baking food, smelting and casting metal, glassmaking, burning pottery and very rarely for making bricks. For the working of metals high temperatures had to be achieved and this was done quite possibly with charcoal. No coal was available in ancient times and wood was not very plentiful. One suspects that ordinary fires were fed with any dry vegetable or animal matter that was at hand.
The heat of the sun on the other hand was put to very good use in the production of mud bricks, which were the perfect building material in a practically rainless country like Egypt. Libyans, Kushites, Assyrians and Persians, would become oppressive under the Roman Empire, which exploited its provinces ruthlessly. The attempts of Cleopatra VII to retain independence were unsuccessful and the country fell prey to Octavian. For as long as Rome ruled the Mediterranean, Egypt was little more than its bread basket.
Unlike the much vaunted empire of the New Kingdom in the Levant, which was mostly a string of subject states in Lower Retenu run by local potentates, Nubia and Kush, the important conquests in the south, were closely integrated into the Egyptian culture. Lower Nubia at least was directly ruled and exploited by the Egyptians for most of the second millennium BCE. Its importance as supplier of gold, slaves and luxury goods was underlined by the appointment of vice-roys to rule Kush directly. No other region conquered by Egypt was economically and culturally as dependent, nor retained this affinity for centuries after Egypt's power had declined in the first millennium BCE.
Bravery in battle was rewarded with appointments, decorations in the form of golden necklaces and bracelets, and gifts of land and slaves, part of the booty plundered from vanquished enemies. Tribute was imposed on defeated nations and the 'exchange' of gifts between the pharaohs and the kings of client states was generally in Egypt's favour.
Tribute brought before Ramses II, excerpt
Cf. the main article on taxation: Dues and dutiesAncient Egypt is considered by some to have been the most heavily taxed nation and to have collapsed under the weight of the levies imposed on the populace. But, with a few minor interruptions, its society existed peacefully and basically unchanged for more than two millennia. Even in its days of decadence Herodotus thought it provided better living conditions–if health is anything to go by–than most others he had seen,
Scribes recording the amount of grain harvested
... they think that all the diseases which exist are produced in men by the food on which they live: for the Egyptians are from other causes also the most healthy of all men next after the Libyans.one of the other causes being the climate.
The state relied on revenues in the forms of labour and taxes paid in kind. Grain was the most important produce hoarded by the authorities, as it could be stored with relative ease and was vital in years of bad harvests.
Of course, different classes of people benefitted to different degrees, but care was taken not to leave too many people with nothing to lose, a lesson the Spartans and the Romans for instance never learned. While famines affected the poor much more than the rich, in normal times there was not that much difference as regards health, survival of ones children or even longevity.
Peasant villagers, on the whole the poorest segment of the population, hardly ever travelled far and their knowledge of what lay beyond their own community was limited. They came into contact with low ranking scribes and overseers, who were not much better off than they themselves. But by thrift and hard work they could hope to gain additional property and rise on the social ladder. possession of land.
Theoretically all the land belonged to the pharaoh who could dispose of it at will. Large tracts were given to the military, above all during times of unrest when the kings needed their support and were unable to recompense them in any other way. Officials were also beneficiaries of such royal munificence. But most of the land came to be owned outright by the temples and the peasantry.
A considerable amount of wealth was invested in the building of tombs and the services following burial, which were supposed to go on for ever.
 Estimates of ancient population figures are mostly more or less educated guesses. Bagnall and Frier's estimate of the urban population in the first centuries CE amounts to 37%, making Roman Egypt the most urbanized society of its day; others like Scheidel think it was less than a quarter. [Back]
 Quarrying on the other hand was always done by Egyptian craftsmen supported by draftees to perform the unskilled labour and soldiers for protection, generally in the form of expeditions.[Back]
Bibliography for this and related pages:
Acta Universitatis Upsaliensis - Boreas Vol.6, 1974
S.Allam, Hieratische Ostraka und Papyri aus der Ramessidenzeit, Tübingen 1973
APIS Advanced Papyrological Information System
Bagnall, Roger S.; Frier, Bruce W. ; The Demography of Roman Egypt, Cambridge University Press, 1994
S. Birch, Records of the Past, Series 1, Vol.VIII, 1876, Samuel Bagster and Sons, London
J. H. Breasted, Ancient Records of Egypt, 5 volumes
S. Carmona, M. Ezzamel; Accounting and Forms of Accountability in Ancient Civilizations: Mesopotamia and Ancient Egypt, 2005
Lionel Casson, Ancient Egypt, Time-Life Books
Herodotus, Histories II - Euterpe
T.G.H.James, Pharaos Volk, Artemis Verlag Zürich und München , 1988
J. Kraus, Demographie des alten Ägypten, 2004
M. Lichtheim, Ancient Egyptian Literature, 3 volumes, 1973-1980
Peter van Minnen, Ancient Society 30, 2000
Juan Carlos Moreno García, 2008, "Estates (Old Kingdom)", in Elizabeth Frood and Willeke Wendrich (eds.) UCLA Encyclopedia of Egyptology, Los Angeles, http://repositories/cdlib.org/nelc/uee/1012
Brian P. Muhs, Tax Receipts, Taxpayers, and Taxes in Early Ptolemaic Thebes, Oriental Institute Publications, University of Chicago, 2005
W.M.Flinders Petrie, Illahun, Kahun and Gurob, 1891
Jacob Rabinowitz, Isle of Fire, Invisible Books, 2004
Scheidel, Death on the Nile: disease and the demography of Roman Egypt, Brill 2001
Kurt Sethe, Urkunden der 18. Dynastie Band I, J. C. Hinrich, Leipzig, 1914
R.S. Simpson, Demotic Grammar in the Ptolemaic Sacerdotal Decrees (Oxford, Griffith Institute, 1996)
Herbert Thompson The Demotic Papyri, W.M.F. Petrie Gizeh and Rifeh
Sten V. Wangstedt, Ausgewählte demotische Ostraka aus der Sammlung des Victoria-Museums zu Uppsala und der Staatlichen Papyrussammlung zu Berlin, Uppsala 1954
The Thesaurus Linguae Aegyptiae website
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