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Medias the Risk Manager: The Trierarchy and Consortial Finance

In the Against Meidias Demosthenes accuses trierarchs like Meidias of fraud:

λειτουργειÍ‚ν ἤρχετο, τηνιχαυÍ‚τα δεÌ€ τουÍ‚ πράγματος ἧπται, ὅτε πρωÍ‚τον μεÌ€ν διακοσίους καιÌ€ χιλίους πεποιήκατε συντελειÍ‚ς υÌ”μειÍ‚ς, παρ Ì“ ὧν ειÌ“σπραττόμενοι τάλαντον ταλάντου μισθουÍ‚σι ταÌ€ς τριηαρχίας οὗτοι, . . . ὥστ’ αυÌ“τωÍ‚ν εÌ“νίοις τηÍ‚Í… αÌ“ληθείαÍ… τοÌ€ μηδεÌ€ν αÌ“ναλωÍ‚σαι καιÌ€ δοκειÍ‚ν λελειτουργηκέναι καιÌ€ τωÍ‚ν ἄλλων λειτουργιωÍ‚ν αÌ“τελειÍ‚ς γεγενηÍ‚σθαι περίεστιν.

He has only began to serve as a [naval] liturgist at a time when you have made 1200 men contributors (συντελειÍ‚ς), from whom these men collect a talent and then hire out their trierarchy at a talent. . . so that some of them actually spend nothing while seeming to have done their duty and so they also have become exempt from other liturgies. (Dem. 21.155)

Demosthenes claims that trierarchs abuse their advantageous position as intermediaries between the contributors (synteleis) and the sub-contractor. The trierarch negotiates a private contract with a professional seaman, the terms of which he conceals from the consortium. He then collects the total contract price from the unwitting synteleis. By exploiting his private knowledge of the true cost, the trierarch “pays nothing” since the synteleis cover his own liability and “does nothing” as the sub-contractor performs the service.

Scholars have accepted Demosthenes’ perspective on sub-contracting trierarchs (e.g. Boeckh 1851, 4.13: 726-7, Jordan 78-80, MacDowell 1990, 373). I will show that far from gaming the liturgical system, the trierarch effectively serves both his own and the synteleis’ financial interests by hedging the financial risks associated with the trierarchy.

Demosthenes exaggerates the trierarchs’ power to abuse the system. In particular, Demosthenes distorts a) the trierarch’s ability to accumulate infinitely superior private knowledge; and b) the lack of shared interests between the synteleis and the lead financing trierarch. The costs of discharging a trierarchy did fluctuate (e.g. Lysias 19.29, 42; 21.12; 32.26; [Dem] 50 passim, [Dem] 51.5-6, Isaeus 6.60). Therefore, a trierarch could accumulate private knowledge of the particular costs of a specific trierarchy. Yet, many contributors participated repeatedly in financing trieremes. The Athenian elites enrolled in the trierarchic syndicates, or “symmories,” were drawn from a relatively stable group (Davies 1971, xvii-xxx; Gabrielsen 1994, 66-7). They would have a reasonable expectation that their costs would fall within a certain range based upon their practical experience and shared knowledge: the trierarch does not possess infinitely superior private knowledge that he can leverage.

Yet, the cost variance also exposes each individual syntelÄ“s to financial risk. The trierarch and the contributors are similarly motivated to limit their exposure to cost variability. Both would find contracting out the liturgy at a set price an attractive hedge against the open-ended risks of the trierarch actually performing the liturgy. A contributor therefore would be inclined to pay a fixed sum that includes a “risk premium.”

The trierarch might pass his own initial costs off through a mark-up on each syntelÄ“s’ contribution, but since the trierarch functions as a financial intermediary and as a risk manager for his consortial partners, he is providing valuable financial services. He, however, remains exposed to the counter-party risk inherent in sub-contracting his command since that contract is not enforceable. The trierarch always is ultimately responsible for discharging the duty regardless of the sub-contractor’s reliability ([Dem] 51.8-9). The trierarch thus remains exposed to other forms of risk that do not encumber the contributors.

Trierarchs like Meidias are not “doing nothing and paying nothing.” They are actively managing risk. However repugnant Demosthenes may have found sub-contracting, it remained widespread because it best served the trierarch’s and synteleis’ shared financial interests. More broadly, the practice illustrates that Athenian elites used their practical experience to manage risk in a rational manner.